With debit card swipe fees capped, new bank fees on horizon

After months of high-stakes lobbying, advertising campaigns and trash talk, bankers and retailers have finally found something they can agree on. They all dislike the Federal Reserve Board's decision to cap the fees retailers pay every time you swipe your debit card.

Last week, the Fed voted to cap the fees at 21 cents per transaction, up from an earlier proposed cap of 12 cents. Banks and credit unions say the cap is still too low to cover the cost of maintaining debit card networks. Retailers say the new cap is too high, particularly for small businesses with tight profit margins. The fee cap will take effect Oct. 1.

While the higher cap will reduce the financial industry's losses, it's still expected to cost financial institutions about $10 billion a year, says Robert Hammer, chairman of R.K. Hammer, a bank advisory and research firm. And banks have made no secret about how they'll recoup that money: with higher fees for everything from checking accounts to penny rolls.

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