Big banks relieved as Fed sets debit card rule

The Federal Reserve handed a partial victory to
Wall Street on bank card fees
© AFP/Getty Images/File Spencer Platt

AFP

WASHINGTON (AFP) - The Federal Reserve on Wednesday slashed the fees which banks charge for debit card transactions, but did not cut them as deeply as initially expected, handing a partial victory to Wall Street.

Under the new rules, the fee charged for the average debit card transaction of $38 would be capped at approximately 24 cents, the Fed said in a statement announcing its decision.

Currently, the fee for an average debit card transaction is 44 cents. Banks had feared that the average fee would be cut as low as seven to 12 cents and mounted a fierce lobbying campaign to thwart the changes.

Public schools' 'pay to play' fees: By the numbers

In the face of budget cuts and rising costs, public schools across the country are making ends meet by nickel-and-diming students

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The Week

In some financially struggling school districts, students have to pay fees to participate in extracurricular activities... or not participate at all.

Public schools are supposed to be free. But faced with budget cuts, rising staff costs, and declining tax revenues, many are instituting "pay to play" fees, charging students extra for everything from electives to after-school sports — and even some required classes, like French and basic sciences. Here, a brief guide, by the numbers, to these "controversial" fees:

$18

Course supplies fee for students taking English 9 at Dakota Ridge High School in Littleton, Colo.

Hidden fees cut pension payouts by 75pc

Savers are losing up to three quarters of their pensions in little-known fees charged by the investment funds that manage their money, a report by senior pension experts warns.

Holly Watt
Telegraph

Private pensions in Britain pay out on average half as much retirement income as equivalent schemes in Europe, the report says, with hidden costs blighting the retirement plans of millions.

The report, by David Pitt-Watson, one of the country's leading pension fund managers, and a team from the Royal Society for the Encouragement of Arts, Manufactures and Commerce, warns the Government that the system is in need of urgent reform to bring these costs down.

Earlier this year, The Daily Telegraph disclosed that a range of little-known fees and levies typically wiped more than £100,000 off the value of a middle-class worker's private pension.


Mr Pitt-Watson, the boss of Hermes, which manages the BT pension scheme, has written to Steve Webb, the Pensions Minister, to set out his concerns.

His three-year study highlights how British savers suffer in comparison with their European counterparts because of the fees charged by pension funds.

While the annual levy can appear small, its effect after decades of saving is substantial, the report warns.
This is because the fee is calculated annually as a percentage of the total amount in the pension fund. Each year, therefore, the amount levied increases.

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Bank Sues Bernanke, Fed Over Limits On Fees

Dirk Lammers
Associated Press

SIOUX FALLS, S.D. — TCF National Bank sued Federal Reserve chairman Ben Bernanke and the Fed's board of governors on Tuesday, saying regulations limiting the fees a bank can charge retailers for debit card transactions are unconstitutional.

Minnesota-based TCF National, a subsidiary of TCF Financial Corp., filed the lawsuit in U.S. District Court in South Dakota. The bank said an amendment to Congress' recent financial regulatory overhaul directs the Fed to adopt debit fee regulations based only on the processing costs of authorizing, clearing and settling transactions.

William A. Cooper, TCF Financial's chairman and chief executive, said those costs amount to a fraction of the total amount of money required to manage the debit card system, and the law makes no more sense than regulating the price of a fast-food hamburger based solely on the costs of the meat and the bun.

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