New debit-card deal said reached in Wall St bill (a.k.a. Main Street gets the hook yet again but Jamie Dimon is pleased)

(Reuters) - (Additional reporting by Maria Aspan; Editing by Leslie Adler)

Large banks appeared likely on Monday to face new limits on debit-card transaction fees as a key U.S. senator said he had reached a deal to include the provision in an overhaul of financial regulations.

But card networks like Visa Inc and MasterCard Inc scored a win as the new deal scales back the limits on fees they would have faced under legislation that passed the Senate last month.

Democratic Senator Dick Durbin said his compromise is likely to be accepted by a joint Senate-House of Representatives committee that is hammering out a final version of the legislation, which aims to avoid a repeat of the financial crisis of 2007-2009.

The debit-card transaction fees, also known as interchange fees, are among the disputes that negotiators from the House and Senate hope to resolve this week so they can send a final version of the regulatory overhaul to President Barack Obama to sign into law by early July.

The deal appears to ensure that the committee will quickly resolve the issue when it meets on Tuesday.

"Interchange is now basically done," wrote Concept Capital analyst Chris Krueger in a research note. "Game over."

Retailers, restaurants and other merchants have long complained that card networks and issuers charge them excessive fees to process their transactions.

The United States has some of the highest interchange rates in the world.

Banks and card issuers say the clampdown would benefit merchants at the expense of consumers, who could pay higher prices or see a reduction in banking services.

Major credit-card issuers include Bank of America Corp., JPMorgan Chase, Citigroup Inc and Capital One Financial Corp.

Banks with less than $10 billion in assets would be exempt. Credit-card fees would face no such limits.

The House bill contains no restrictions, and banks have been lobbying furiously to keep them out of the final version.

Durbin's new deal would exempt the fees that Visa and MasterCard charge banks. The Fed would be allowed to ensure that the networks don't use the exemption to pass revenue on to card issuers.

That's a "significant win" for the two card networks, which together control 80 percent of worldwide electronic transactions, said James Ellman, president of financial services hedge fund Seacliff Capital.

Visa closed up 5.0 percent ($3.86) at $80.90 and MasterCard closed up 4.2 percent ($9.08) at $223.34.  Link to full article


Grandpa: Visa closed up 5.0 percent ($3.86) at $80.90 and MasterCard closed up 4.2 percent ($9.08) at $223.34. ENOUGH SAID....credit card companies rise 5% in a day and this implies the financial reform "compromises" are good for the consumer!

When did the "big bad wolf" become a pleasant house pet for the kids?????

Marketwatch 6/21/10:
Interchange fees are small charges that merchants pay Visa and MasterCard  for the right to accept cards run on their payment networks. Those fees are then passed on to card issuers such as the big banks.

Interchange fees worth almost $50 billion were collected last year and roughly 80% of that money went to the 10 largest banks in the United States, including Bank of America Corp.  and J.P. Morgan Chase & Co. according to Durbin's office.

Is it just grandpa or is the media world off its axis?? Small fees equate to almost $50 billion and 80% go to the 10 largest BAILED OUT BANKS!!!