For the people? Not hardly.

There’s an intriguing piece on Huffington Post today discussing the debit card swipe fee debate. Prior to my departure at The Roanoke Times, this is one we were keeping an eye on but hadn’t yet come to a conclusion about. The debate pits giant banks against giant retailers, and they’re arguing over billions of dollars worth of fees – the small charges on debit card transactions add up.

Last year’s Wall Street reform bill included an amendment by Sen. Dick Durbin instructing the Federal Reserve to regulate and cap such fees. It was a small part of a large bill, but once the import of it struck banks – $16 billion in annual revenue up in smoke – they went to town.

I think I come down on the side of the retailers on this one. My mostly uneducated sense is that banks are taking awful advantage of the system and charging far more than is warranted for what ought to be a pretty low-cost service. One of the last editorial board meetings we had with an outside party was with the president of the Virginia Bankers Association, who did his best to convince me otherwise. He pointed out that banks assume many risks with these transactions if they happen to be fraudulent. I was not exactly won over, but never had the time to fully investigate to come up with a supportable position.

What struck me about the Huffington Post piece, though, was this paragraph:

The swipe fee debate, as mundane as it may appear, is emblematic of how Washington works today — and helps explain why Congress hasn’t passed an appropriations bill in years, can’t write an annual budget, is flirting with defaulting on the country’s debt and effectively gave up on job-creation efforts in the midst of a brutal economic downturn. There are, to be sure, a variety of reasons that Congress is zombified, but one of the least understood explanations is also one of the simplest: The city is too busy refereeing disputes between major corporate interest groups.

That rang a bell. What I kept thinking in the banker meeting was, “What about the consumer?” I don’t know what approach best benefits consumers, who have grown increasingly dependent upon the ability to swipe a debit card anywhere they go. But Washington doesn’t seem to care. And this isn’t an isolated incident:

One frustrated moderate Democratic senator asks to remain anonymous so he can speak freely about his legislative education. “I’m surprised at how much of our time is spent trying to divide up the spoils between various economic interests. I had no idea. I thought we’d be focused on civil liberties, on education policy, energy policy and so on,” the senator says. “The fights down here can be put in two or three categories: The big greedy bastards against the big greedy bastards; the big greedy bastards against the little greedy bastards; and some cases even the other little greedy bastards against the other little greedy bastards.”

Big money means more than the interests of the people because big money provides the cash that gets congressmen elected. It’s a sad state of affairs.

And I still don’t know what to think about the debit fee issue.

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