Cretinism is contagious, spreading out from Illinois in all directions - Price Fixing for Debit cards

The Obami have decided to regulate interchange fees and quixotically set the prices below total cost for the Debit card industry.

In a provision reminiscent of Soviet-style economic planning, the Durbin amendment requires the Federal Reserve to determine interchange transaction fees for debit that are "reasonable and proportional" to the "actual cost" to issuers with respect to the transaction. But the amendment does not permit recovery of the actual cost to issuers from debit transactions, only the "incremental" cost of a particular transaction. The massive fixed costs of running the network and servicing cardholders would be excluded, guaranteeing that debit card issuers will lose money on their debit card operations. That's not sustainable.

These precious dears think that somehow banks will continue to provide debit card transactions at a loss rather than raise prices on consumers in a non-regulated area.

My good friend Rahul Gupta, Group President for Card Services at Fiserv had a one word answer when I asked him about the Obami's consumer finance regulations:  "Chaos".

I guess BHO really was serious about one term.