Barney Frank Could Save Visa and MasterCard
Visa Inc. (NYSE:V) and MasterCard (NYSE:MA) have a very powerful friend, U.S. House Financial Services Chairman Barney Frank.
WASHINGTON, Dec 17 (Reuters) - The Federal Reserve's proposal to limit debit card fees would not allow card companies to cover the full cost of transactions, U.S. House Financial Services Chairman Barney Frank said in an interview on CNBC.
The proposal released on Thursday would generally limit debit "interchange" fees at 12 cents per transaction. The average interchange fee for all debit transactions was 44 cents in 2009, the Fed said.
"I think the way it was written, the amount the credit card companies are allowed to charge is too low," said Frank. "It does not reflect the full cost of all that you have to do if you are running a credit card operation."
Banks charge retailers the fees and merchants have long tried have a limit put in place.
The fee limit was included in the financial regulatory overhaul law enacted in July. Frank is one of the law's main authors and it is often referred to as Dodd-Frank, with Senate Banking Committee Chairman Christopher Dodd being the other lead author.