Some news organizations, namely Daniel Indiviglio over at The Atlantic (see http://www.theatlantic.com/business/archive/2011/09/did-congress-kill-the-debit-card/245935/?google_editors_picks=true) are arguing that since the Dodd-Frank rules the banks have lost a significant source of revenue and that they’re entitled to recover it from the consumers. The argument here is that we’ve always had to pay this fee, it was just indirect and hidden in the cost of goods we have to buy. That’s only partially true but it’s mostly bullshit. It’s partially true in the sense that we have been paying it indirectly. It’s bullshit in the sense that the banks aren’t entitled to this. Their costs for processing an electronic transaction, ATM or credit, is nearly zero. True, they had to spend a lot of capital to set up the infrastructure but that capital outlay has been paid back with interest many many times over. Now it’s just free money to them. It’s not even to recoup any costs. Not anymore anyways.
So how do we as consumers fight back? Simple. But it’s not by switching institution. It’s by writing checks. We’ve been so conditioned to use our credit cards & debit cards for everything, even the $1.25 cup of coffee. There’s no doubt it’s a convenient but if consumers want to demonstrate why charging us directly for ATM debit purchases is just going over the top, it’s by writing checks again. And lots of checks. Checks cost the banks many times more to process than does electronic transactions via your debit card or your credit card. If enough people do this then the banks will get a very clear message. They simply need to adjust to the new reality and this is how consumers can fight back.
I repeat, switching from a big bank to your local credit union will not help. You’ve got to hit back where it hurts and start writing those checks. Minor inconveniences by all of us will have a huge impact for everyone at the end of the day. Who’s with me?