So says Richard Epstein in today’s Washington Times. Richard argues that by depriving debit card issuers of a reasonable rate of return the Durbin Amendment capping debit card fees, as interpreted by the Federal Reserve, is unconstitutional.
In related news, Chase announced (even before the Fed announced its unexpectedly onerous price caps) that in response to the Durbin Amendment in Feb. 2011 it would start phasing out its rewards debit cards, imposing new fees on checking accounts, and scaling back on the availability of free checking. In light of the Fed’s announcement that debit fees will be slashed much more than expected, consumers can expect to feel an even greater pinch with new bank fees and fewer bank services than was originally predicted.
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