Dear Dick Durbin:
How you doin’, dude? Hope all’s going well.
You probably know this already, but in case not, there’s a whole bunch of credit union folks about to descend down on you to bitch and moan about your proposed “reasonable debit fee” legislation.
Don’t listen to them. They’re 180 degrees wrong. Not only should we not back off from the reasonable fee approach, we need to extend it to other areas outside of financial services. Here’s where you need to start:
iPads. Apple wants to charge $700-800 for these things? WTF. According to BusinessWeek, the components for an iPad costs like $260. “Reasonable fees” suggests that this is capitalist pig price gouging on the part of Apple. You should give the FTC the authority to set a “reasonable” price for iPads.
Cars. Best as I can tell, Ferrari doesn’t use some special and rare magnotitanium to produce their cars. Doesn’t cost any more to make than my Yugo. “Reasonable fees” says these things should cost $25k — not $250k.
Houses. There is no reason why that pile of wood and concrete you live in should cost $1 million. The wood probably cost $150. Labor to build it: $1000. The land it was built on: Already there. But I guess it did cost $100 to have someone level it. “Reasonable fees” says you should get ~$10k for that house.
And when a representative from MasterCard writes…
“Debit interchange on prepaid cards effectively allows the government to save taxpayers money by putting disbursements from unemployment insurance and child support to social security and disability payments onto prepaid cards instead of checks with no or very low cost”
…you should feel free to consider this to be the rantings of some lunatic. I mean, after all, with the changes you’ve proposed and what the administration is doing for the economy, unemployment should be eradicated completely in a few months, so who’s going to need these cards anyway? Right? Really now, the nerve of someone proposing to keep the cost of government down. Sheesh.
So stand strong Dr. D, and don’t let these CU folks rattle you. And let’s get working to extend reasonable fees to other industries and areas of the economy. Because that would only be “fair”, right?
All the best,