State laws provide relief, but nationwide credit card competition is the answer

In Illinois, misinformation spread by big Wall Street banks has pushed the General Assembly to delay a first-in-the-nation ban on credit card swipe fees on sales taxes and tips, just weeks before it would have taken effect July 1.

Rather than receive savings of $500 million a year beginning July 1, Illinoisans will have to wait another year — although doing so will at least provide time for the courts to overrule the misguided attempts of the Office of the Comptroller of the Currency to meddle beyond its authority in state affairs by backing banks’ unfounded claim that the state law is preempted by federal banking law.

In Colorado, a similar bill saving consumers $200 million has just been vetoed by Democratic Gov. Jared Polis after banks cried poverty and pushed a variety of false claims in a similar attempt to derail the measure.

Frankly, the banking industry should be embarrassed. Year after year, the industry averages net profit margins around 30 percent — among the largest of any U.S. industry. You might think software, AI or even old school businesses like oil and tobacco would have higher margins, but they don’t.

Why? Well, for starters, no other U.S. industry gets to fix prices among competitors. OPEC comes close to doing so with crude oil, but even OPEC only sets volume limits on production — it doesn’t have the gall to tell competitors the actual prices they need to charge. Visa and Mastercard do exactly that with credit card swipe fees by centrally setting the rates charged by all banks that issue cards under their........

© The Hill