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Credit Card Applications » News » Other » Senate Limits debit card transaction cost

Senate Limits debit card transaction cost

June 02, 2010 | Updated on June 02, 2010
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The content is accurate at the time of publication and is subject to change.

The Senate at Washington approved of a law to put limits on the money firms can take from consumer for debit card transactions. Senators voted, and 64 voted for the bill and 33 against the bill. The bill will stop companies from charging for debit card transactions in their banks. The Federal Reserve will have control over the fees for transactions. Banks charge up to 3% of the total cost of the purchase for every transaction a person makes with his card.

The new bill will give people who make transactions by cash discounts and those who wish to pay by card, can use their card for the transaction only if their purchase is above a certain cost.

"To make up for interchange fees, businesses are forced to raise their prices, cut back on expenses or something such as that. If left alone, it is going to get worse for small businesses that face higher fees, for consumers who face higher prices, and for everyone but the banks and credit card networks," Sen. Richard Durbin who sponsored the bill said.

Banks have more than $10 million is assets under their control, the bill was supported but retailers and opposed by banks.

Many experts say the bill will hurt banks in many ways but will not help consumers. Experts also say the inconvenience of having to purchase a certain amount before paying by card will harm customer usage.

Sen. Kay Bailey Hutchison, R-Texas, did not vote. Sens James Inhofe and Tom Coburn of R-Okla voted against the bill while Sen. John Cornyn, R-Texas also voted against the bill.

A bill for $85.6 billion which was meant for the science education bill was cut off after the Republicans said they lacked the funding it required. Ralph Hall, R-Texas said the science education bill was frozen to stop "excessive spending."

The anti-porn bill which was to be passed soon saw lawmakers get nervous over the political sensitivity of voting in this bill. Employees who have been caught accessing porn on their computers were punished and employees at the NSF also have similar problems.

Bart Gordon of D-Tenn., said the anti-porn provision "means nothing," but he will "gut the entire bill. This is an embarrassment, and if you vote for this, you should be embarrassed."

Democrats voted 125 against and 121 for the bill all except Tom Cole, R-Okla voted.

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All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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