Don’t Make Us Pay Redux; Banks Respond “Well then…you can’t use your money”

I threw up this post a little while back exposing one of the latest astroturfing/lobbying campaigns by the big banks and credit card corps. 

The attached video to that post is now the #1 link on google for the phrase “Don’t Make Us Pay”...if you discount the three top links that go directly to the astro-turfing campaign itself.

Thanks to those who have linked it, and commented, THANKS!   I hope it stays up there, the feedback has been quite positive.  One of the most greatest things about the internet is the power it gives individuals to enhance their voice.  I don’t have millions of dollars in misbegotten profits to use to get my message out, but that doesn’t mean I can’t bend billions of dollars in telecom and IT infrastructure, ever so slightly, to my will. 

Now, despite their billion-dollar funding advantage, we’re on pretty much the same level when it comes to Internet searches.  (Bing doesn’t like Youtube as much as Google, natch, but it does still link back to my post in the top 5).

So now that the rhetoric has been s0mewhat neutralized, and we know who “Us” is in the phrase “Don’t Make *Us* pay”, we get into the real action, and the threats ensue…

“Many members in [Congress] are being lobbied right now by banks and card companies to repeal this law, to undo the interchange reform that Congress passed last year. It is one of the most active lobbying efforts I’ve ever seen,” said Illinois Sen. Richard Durbin, who was speaking on the Senate floor late Thursday. “Normally the card companies and the big banks are used to getting their way in this town.”

And there’s the standoff.

Banks are already breaking out the threats to consumers. On Thursday, CNNMoney learned that JPMorgan Chase is considering denying all debit card purchases greater than $50 or $100 — regardless of whether you select “credit” or “debit” at the register.

“The debit card that we know and love today will never be the same again if this rule goes into effect,” said Trish Wexler, a spokeswoman for the Electronic Payments Coalition, which represents Visa, MasterCard, credit unions and banks. “Some people will have to pay more per transaction, some people won’t be able to make certain purchases, and customers are going to have a choice — do I switch to credit, go to a prepaid card and pay for extra fees, or go to a nontraditional bank if I don’t have a credit card?”

[full story]

The article includes some general quotes from both “sides” of the argument.   On the one side is everyone who is making billions off the current setup, on the other side is everyone who is paying billions because of the current setup.   The line on this one is easy to draw.

The timeline on this one is also very short, so now would be a good time to call your Congressperson, tell them where you stand on this issue AND point out to them the b.s. lobbying effort and your opposition to that as well.   We’ve got six weeks.

“This is a huge step in curtailing out of control fees,” said Rachel Wolf, a spokeswoman for the Merchant Payments Coalition. “Because retail is such a competitive industry, any savings retailers get they are going to pass along to customers, because if you don’t offer competitive prices, someone’s just going to go across the street to the competitor.”

The new rules are expected to become official in just six weeks and then go into effect in July. As a result, the battle is getting pitched and banks are spending huge sums lobbying against what is known as the Durbin Amendment to the Wall Street reform act passed by Congress last year.

The act required the Federal Reserve to regulate the interchange fees on debit cards in order to keep retailers and consumers from paying more than their fair share for the banks’ services.

If, over the last few years, you’ve been following what’s been going in the U.S. and the world, you know that one group has largely been spared from the recession, and indeed, seems to have prospered mightily from it.   What the financial reform legislation provided was a means to recoup some of that imbalance and re-level the playing field.

Big banks don’t want that, but I hope you do.  And I hope you do want it enough to contact your Congresscritter and make your views known.

“Don’t Make Us Pay”: A Look Into Why and How Visa is Running Their Dishonest Astroturfing Campaign

You may have seen the banners already.  “Don’t Make Us Pay”, they say.   If you click, and see what the incredibly vague campaign is about, you end up at this page.

It includes total lies like…

Government bureaucrats have issued a new regulation that will give retailers $15 billion in windfall profits — and will force you and other debit card users to pick up the tab.

As a result, you may see higher fees, fewer rewards and more restrictions on your debit card.  You could even see the loss of free checking.

You shouldn’t have to pay more just because giant retailers don’t want to pay their own bills.

It’s not too late to stop this harmful regulation.

Tell Congress:
Don’t Make Us Pay.

This hits on all the buzzwords of the current nutjobs.   Oooh, those government bureaucrats, issuing new regulations dang Fed, setting “price controls” and getting “consumers to foot the bill.   And it’s all because “they” have been lobbying Congress for years.

To put this campaign into perspective you need to know a few things.  First, the only reason you know it’s Visa running this is because I just told you it was (I’ll get to that rather hilariously obvious proof in a minute).  If you read around that “Don’t Make Us Pay” website, you will have a hard time figuring out who “us” is.  “Us” is Visa, which is now a public company (a rather profitable one, at that).   A quick refresher…

NEW YORK (Fortune) — Visa, the giant credit card issuer, ended its first day as a publicly traded company at $56.50 a share, 28% above its initial public offering price of $44.

The closing price topped off a triumphant IPO for the biggest brand in credit cards, which priced Tuesday night for a record-breaking $17.9 billion. The company sold 406 million shares for $2 more than its estimated $39-$41 range. It began its first trading day on the New York Stock Exchange at $59.50 and climbed as high as $69 in intraday trading.

The Nilson Report projects that paper-free payments will account for 70% of all payments by 2010 and that 56% of sales will be conducted via credit and debit cards from the current 40% or so. Visa, with its iconic brand, is poised to capture much of that growth. Morningstar estimates that Visa’s total dollar volume will grow at a double-digit rate for the near future.

[full story, from back in March 2008]

Note that date, Visa went huge right before the collapse.  I’m wouldn’t be surprised if it comes out that they went public because of the looming collapse (the financial industry knew it was coming and coming hard, by the beginning of 2008).  So you have this fulcrum of the digital economy going public right before the economic collapse, the insiders making millions and the public buying it.

So to bring it back up to date…you know what…screw it…let’s do it live!

Postscript….news from today….

The Center for Responsible Lending study said the difference between the stated rate on credit card solicitations and the rate consumers actually paid widened to unprecedented levels in 2004 and stayed there through 2008. After the new rules took effect, the stated prices on solicitations moved much closer to actual prices, the study found.

“An estimated $12.1 billion in previously obscure yearly charges are now stated more clearly in credit card offers,” the advocacy group said.