June 08, 2010
Durbin Creates "Bailout" for BP, Walmart, Etc.
Politics is a dirty business... we all know it.
That understood, there are practical limits to what the American people can stand, and Illinois Senator Dick Durblin seems to have jumped far over that line, listening to lobbyists who want to shift the cost of credit card transactions directly to the consumer:
The Durbin amendment imposes a price control scheme on the fees oil companies and retailers pay when they accept payment by credit cards. The amendment was conceived and pushed for by lobbyists for big oil companies and big retailers like BP and Wal-Mart. Their goal is simple — shift the costs of accepting credit cards from their bottom line to the consumers.Durbin admitted that he offered the amendment after detailed discussions with a big retailer CEO. The bottom line is that the Durbin amendment will put billions of dollars into the pockets of Wal-Mart, big oil companies like BP and other big box retailers who depend on consumers and their credit cards for revenue. It's unfathomable that while the government has opened a criminal investigation into BP, the US Senate wants to hand them a massive check. Under the Durbin "BP Bailout" amendment, giant corporations will no longer be required to pay their fair share of the costs of receiving these services. Consumers will now pay those costs.
Democrats have long tried to claim the mantle of the "party of the people," but they have the problem of being as deep or deeper in debt than Republicans to big business interests, corporations and especially unions. Durbin's amendment is nothing more or less than an attempt to push the cost of doing business from the corporation to the consumer.
I wonder how much he cost.
Meh. I pay 3% and more if rewards cards are used for the privilege of accepting credit cards for payment. Monthly bills in excess of $600.00 hurt this small business owner. Why should I foot the bill for someone who won't budget for expected expense?
Posted by: Flavius at June 8, 2010 02:26 PM"I wonder how much he cost."
Nothing upfront, as they simply put him on a charge card.
Posted by: arb at June 8, 2010 03:39 PMIf I am understanding this correctly, I have no problem with the credit card customer paying their transaction fees. Presently, people paying cash are in effect subsidizing those who pay with credit cards.
What I don't understand is why it takes Government action to shift the costs?
If Wal-Mart wants consumers to pay the transaction fee, why don't they just add it to the tab at check out?
Posted by: feeblemind at June 8, 2010 04:04 PMIt's a bit silly to call this a bailout for BP when it applies to all retailers and AFAIK, BP isn't a retailer, what with gas stations being franchised.
I agree that the government should MYOB, but this is irresponsible on the part of the Big Government writer.
Posted by: Pablo at June 8, 2010 07:31 PMIf Wal-Mart wants consumers to pay the transaction fee, why don't they just add it to the tab at check out?
This is a load of BS.
WallyWorld and all the rest CURRENTLY "charge" consumers for their cost-of-transaction--it's called "higher prices" on all their merchandise.
You don't seriously think that WW/BP/Hertz are reducing their overall profit margins, do you?
Posted by: dad29 at June 9, 2010 09:05 AMAs always, follow the money:
http://www.investors.com/NewsAndAnalysis/Article/536821/201006091838/Fat-Cats-Feed-On-Durbins-Fee-Change.aspx
Posted by: arb at June 9, 2010 06:52 PM"Durbin's amendment is nothing more or less than an attempt to push the cost of doing business from the corporation to the consumer."
I can't believe you said that, CY. Any cost of doing business is passed on to the consumer by a business.
This method of consumer paying the cost of using their credit cards is hardly any different than your employer paying your federal and state taxes on wages, but no one would say I don't pay those taxes, the employer does.
I'd note that anyone who does pay cash is getting a raw deal, as they subsidize those who use credit cards.
I'd also note if your credit card is a Visa/MC via your local bank, the reality of the transaction is you have your banker with you at every transaction taking 3-4% out of your wallet every single time you use that card, whether it's a credit or debit one. Think about it ... if you filled up your 14G tank with $3 gas your handed about $1.26 over to your bank .... putting that $300 grill on your card and your handing your banker about $9.
Right now, there is no difference if you pay by cash or credit. I don't know if Durbin's bill would require the card issuer to add the transaction after the fact to your card, but if it does, then you'll see prices drop and you'll save money by paying in cash.
Posted by: Dusty at June 10, 2010 06:30 AM
