Debit Card Fees Urge a Push Near Deadline

WASHINGTON — It seemed a good idea last year, when the financial crisis had turned banks into Public Enemy No. 1 and lawmakers were looking for ways to reward consumers still bitter about billion-dollar bailouts and executive bonuses.

Without much warning or debate, the Senate passed an amendment directing the Federal Reserve to reduce the hidden “swipe fees” that banks collect from retailers each time a customer makes a purchase with a debit card.

Merchants, who had complained that the $20.5 billion in annual fees were biting into their profits, were elated. Banks were stunned. Their lobbyists tried to reverse the move, but when the overhaul of the nation’s financial regulation was passed by Congress last July, the debit card cut survived.

A coalition of banks and card companies have plastered subway cars and Internet sites with ads warning, “Bureaucrats want to take away your debit card!”

Banks encourage consumers to use debit cards by signing for their purchases, rather than entering a personal identification number at the cash register. Card companies and banks earn higher fees on signature-debit transactions, but they also incur higher rates of fraud.

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