Wednesday, May 26, 2010

Banksters Create New Fake "Consumer" Group

Center for Media and Democracy

Lisa Graves

According to a story in the Washington Post by Mike Konczal, the Big Banks have just created an astroturf or cashroots group called the "Consumers Against Retail Discrimination Alliance" to fight a provision of the financial reform bill: This nominal "consumers" group is constituted of really, really big "consumers," according to Konczal, including "Visa, MasterCard, Bank of America, JP Morgan Chase, U.S. Bank, Citi" and almost every banking association that is part of the more accurately named "Electronic Payments Coalition." They have attempted to label this a corporate "civil rights" issue by talking about "discrimination" -- or "retail discrimination," that is.

So what is this terrible "retail discrimination" that the Big Banksters are whining about? They are worried about Senator Dick Durbin's "interchange reform" amendment becoming law. "Interchange" is financial-sector jargon for standard agreements that allow Visa and other credit and debit card companies to charge the stores you shop at an "interchange" fee, which is basically a private tax by Visa and other companies on every purchase you make. Senator Durbin's provision is intended to help protect local businesses by allowing them to set policies to require cash for certain sized purchases, so that they can avoid paying arbitrary fees on small purchases. This can have the effect of transferring their small profit margin to some distant Big Bankster. As Jinger Duryea, who owns convenience stores in Maine, explained to the Washington Post, if a customer buys the local paper for 75 cents, Jinger's profit is 9 cents if the customer pays cash, but if the customer uses a debit card, Jinger pays 25 cents for the transaction plus a .08% interchange fee. If the customers uses a credit card, the transaction fee is 19 cents but the interchange fee is 1.68%. The bottom line is that the local retailer either loses money or has to charge the consumer more, if the product can be listed for a higher price, all to pay the private tax levied by the Big Banks.

The quickie splash Website the Big Banksters have launched for the fake consumer group uses the slogan "Tell Congress: Hands Off My Wallet." They probably do mean "my" as in their wallet, not yours.

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