WSJ headlines and questions for January 25 2012

WSJ headlines and questions for January 25 2012 - WSJ...

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WSJ headlines and questions January 25, 2012. WSJ Headline January 23. Little Lenders Benefit From Debit-Card Rule Small banks are getting an advantage over big banks under the Durbin Amendment of the Dodd-Frank financial overhaul. The Durbin Amendment limits the debit card transaction fees that banks can charge merchants, lowering the maximum to about 26 cents (21 cent interchange fee plus a few cents to cover fraud costs) from an average of 44 cents. This is expected to cost the banking industry about $6 billion in revenues in 2012 alone. However, the Durbin Amendment only applies to financial institutions with at least $10 billion in assets. While these banks hold about 80% of US bank assets, most of the banks, about 7300 out of 7436 US banks (presumably includes thrifts as well as commercial banks), are exempt and can charge as much as the market and competitive conditions will bear. They often charge three times as much and in some cases, they are charging as much as 95 cents and making significant profits. The measured benefits to merchants (who may or may not pass them on to customers) are
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This note was uploaded on 02/17/2012 for the course FINA 465 taught by Professor Berger during the Spring '11 term at South Carolina.

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