Fl. Legislator Wants To Prohibit Debit Card Fees
TALLAHASSEE (CBSMiami/NSF) – A Florida lawmaker is fighting back against nationwide banks who want to charge customers monthly fees for debit card use.
Under a measure filed in the state Legislature Monday, the practice of charging monthly fees for using debit cards would be banned. The proposal would also prevent consumers from being charged for not using their cards.
The bill (HB 375) would definitely affect nearly two-thirds of Florida banks, those regulated by the state. Whether it would affect the remainder, including some of the big national banks that customers are mad at, is in dispute. The banking industry says those federally regulated banks wouldn't be covered, but the bill sponsor argues that a 2009 Supreme Court decision opens the door for the state to put limits on those banks as well.
The bill is sponsored by Rep. Jeff Clemens, D-Lake Worth, who said banks are trying to recoup losses accrued elsewhere.
"The banks sold us all on the idea of a cashless society, and now that we've bought into their promise of free, easy access to our own money, they want to charge us for it," Clemens said. "Anyone with a sense of decency should be outraged."
Last month, Bank of America announced it would begin charging customers $5 a month for debit card use, joining SunTrust and Regions banks, which already impose such fees.
Bankers argue that the state can't regulate federally regulated institutions, and so BOA wouldn't be covered by the prohibition anyway, said Anthony DiMarco, a lobbyist for the Florida Banking Association.
But Clemens disagrees, citing the 2009 U.S. Supreme Court decision in Cuomo v. Clearing House Association, a case out of New York, in which the court by a 5-4 ruling decided that a federal banking regulation did not preempt the ability of states to enforce their own fair-lending laws.
"To me it's clear that the Cuomo case allows states to be able to not only regulate local banks but also federal banks," Clemens said.
Banking industry officials oppose the measure either way, saying such fees are needed to recoup costs and make up for federal legislation passed in 2010 limiting their ability to charge retailers for swiping their debit cards.
"Generally, we are opposed to anything that restricts our ability to determine fees," DiMarco said.
The federal law limits the amount of money banks can charge merchants when customers use a debit card. Banks say the federal law will cost them an estimated $6.6 billion per year in revenue. Rather than recoup their costs by boosting fees to retailers, banks are turning to consumers to pay the bill.
An industry survey conducted by Bankrate.com in August found ATM charges at their highest rates for the seventh straight year. The higher fees coincide with a decline in free checking accounts and higher penalties for non-sufficient funds.
Clemens' measure is one of a number of bills affecting banking fees and consumer credit as the market adjusts to federal legislation, a sluggish economy, and cash strapped businesses.
Earlier this month, Sen. Mike Bennett, R-Bradenton, filed a measure (SB 438) that would raise the maximum allowed interest rates on some loans of less than $25,000. An identical measure (HB 275) was filed by Rep. Rachel Burgin, R-Riverview.
The consumer credit bill has come under fire from consumer groups that say now is not the time to raise the portion of loans that can be subjected to higher interest rates. "There is nothing in this bill that is good for consumers," said Brad Ashwell, the legislative advocate for Florida Public Interest Research Group.
"The News Service of Florida contributed to this report."
