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$5 Per Month Transaction Fees on Debit Card Purchases: Just the Tip of the Iceberg?

September 30, 2011

The announcement yesterday by Bank of America that account holders who use their debit cards to make purchases would soon be charged a $5 per month fee — and the realization that other banks would be following suit — was front page news this morning across the country.  Banks claim they’ve been forced to introduce the fees by a new Dodd-Frank Act-mandated restriction on what they’re allowed to collect from merchants on each transaction.  The provision, which you can read about in detail in this final rule from June 29, goes into effect tomorrow, October 1.

Photo by Carola Jacobs. Some rights reserved.

Time will tell if the public is sympathetic to the banks’ argument. Regardless, the precedent has been established: many banks, not content to just swallow their medicine, will be looking for ways to pass on to their customers the burdens imposed on them by Dodd-Frank.  Which begs the question: What might be next on the horizon?  What other burdens does the financial services industry perceive it’s been saddled with as the result of Dodd-Frank’s passage, and which we might be asked to pay for?

One quick way to begin to answer this question is to see what banks have said in the Risk Factors section of their SEC Filings.  If we go to the Knowledge Mosaic Risk Factors search page, we can find such disclosure by searching on the relevant industry code range (SIC 6000~6300 should do it) over the last 12 months, combined with relevant keywords.  So, for example, if we search on “Dodd-Frank and debit card,” we get 84 results.  Many of these statements provide a laundry list of “significant changes” related to the Act that could adversely affect their bottom line – and perhaps yours too.

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