Fed proposed to police lending by slashing debit interchange fees to 12 cents.

Who deserves to get ripped off the most? And where exactly does the money go to? Is the government price fixing?

Under the Dodd-Frank bill, the Fed proposed to police lending by slashing debit interchange fees to 12 cents for any banks greater than $10 billion in size. This is a 70% less than the existing average. Fees that seem to be growing higher by the minute will finally be controlled.

Many people have different perspectives on the topic of credit card legislation. Here are a few to examine:

Customers, help yourself before you save Wal-Mart!

If the past is any indicator of how these provisions work, you'll probably want to think more than two seconds before you swipe your card at the pump.

• The plastic execs are likely to raise fees or devise other creative tricks to make up for their lost income.
• If competition forces Wal-Mart (who pays credit card fees) and other retailers to share its wealth by offering customers significant discounts via cash, check or debit cards, you will gain very little. Even though retailers truly do have their customers' interests at heart, they wouldn’t spend all this effort sending proposals to Congress and suing Visa and MasterCard, if they were willing to give it all away.

Retailers frustrated by uncontrollable fees, desperately need governments help

As gas and food prices increase and 80% of buyers use credit (that is 10,000 transactions per second). Interchange fees are the fastest growing expense even over labor and health costs. Instead of charging you a transaction cost, retailers pay between 1.5-3% every time you sign a charge slip. Some low margin businesses are forking out more in fees than they earn in operating margins, causing them to make difficult business decisions. Following the European Union, Canada, and Australia’s lead, retailers argue that government intervention is necessary to protect them from the colossal monopoly credit card companies enjoy (They control 71% of the debit market) .

Large banks face the realization that their enviable monopoly might be taken away

“The statute makes no more sense than regulating the price of a Burger King hamburger solely to the costs of the meat and the bun," according to TCF Bank CEO William A. Cooper. The proposed fee caps will squeeze banks profits significantly because 8.5% of their revenue comes from debit card fees. Even the stock market is worried. When the proposal was announced, shares of financial firms fell sharply.

Bankers claim that cardholders and merchants will soon realize that they won’t know a good thing until it’s gone. The 12 cents loss is not sufficient enough to cover all the benefits they are used to receiving (such as fraud protection).

Small banks may have been able to boast that they were fine in the financial crisis, but might be in the most trouble and potentially the next to collapse

Smaller banks keep reminding us how well they held up well when times were tough. Less than 4% of community banks failed and this was at a time when larger banks were collapsing by the minute. In today's economic times, they might have the most to lose. Since Dodd Frank only applies to card issuers with $10 billion or more in capital , merchants might ditch the smaller guys and go where the fees are lower. If smaller banks don’t lower their fees, they might be the next to suffer.

I am curious to see how the debate continues, and who gets mad at whom next. I wonder if the bill will really get passed. Only time will tell.