Massachusetts Democrat Barney Frank slammed Bank of America and other financial institutions Friday, saying U.S. consumers were getting the short-end of the stick when it comes to an announced decision to increase bank fees.
“I regard this as mostly a dispute between two groups of businesses, banks and retailers, and the consumer gets squeezed,” Mr. Frank told Reuters on Friday.
The Massachusetts Democrat, who co-sponsored the Dodd-Frank financial reform bill, said he still supports opposing a decision by congressional lawmakers to include the fee crackdown in the legislation.
“The banks will charge you more, and I don’t think the retailers are going to charge you less, which is why I didn’t want to put it in the first place,” Mr. Frank explained.
Mr. Frank’s comment comes just days after Bank of America announced that it would begin charging a $5 monthly fee to customers using their debit cards at retail locations. The announcement has been met with criticism from consumers and lawmakers.
Senator Dick Durbin, a Democrat from Illinois, led the charge to include the swipe fee limits in Dodd-Frank. He has maintained that the legislation will decrease prices for consumers and help small merchants struggling to meet processing fees that amount to about 400 percent of the processing cost.
Bank of America announced its plan to increase debit card fees just hours before a cap on debit card fees took effect. The Federal Reserve announced in June that it would support capping “interchange fees” at an average of 24 cents per debit card purchase. The current average fee is 44 cents on a typical debit card purchase of $38.
