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Fed lists swipe-fee exempt banks

By Claes Bell · Bankrate.com
Thursday, July 14, 2011
Posted: 9 am ET

Since the Durbin amendment calling for a cap on swipe fees passed as part of the Dodd-Frank financial reform bill, I've written a lot on this blog and elsewhere about how banks may raise their fees to compensate for lower debit card revenues.

Of course, a sharp rise in fees seemed more likely when the Fed proposed a maximum fee of 12 cents per transaction than it does with the 21-cent cap, plus allowances for fraud protection. Still, there may be some fallout from checking and savings account holders as banks try to replace some of the revenue the cap will cost them.

It's worth remembering, then, that institutions with less than $10 billion in assets are exempt from the limit. To help payment card networks tell which banks can keep their higher fees, the Fed has put out a list of exempt institutions in a number of formats. If you're concerned about your checking account fees going up and bank at a smaller bank or credit union, it might be worth taking a look to see if your institution is on the exempt list.

Although many in the financial industry and even some at the Fed, including Federal Reserve governor Elizabeth Duke, question whether payment card networks will actually end up charging two different prices, it's possible these smaller institutions will be able to escape the swipe-fee limits and thus not have to raise fees as much as larger institutions.

What do you think? Will smaller banks and credit unions end up being caught up in the swipe-fee limits, or will they have an advantage over bigger banks going forward?

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