Congressman Peter Welch is asking the Department of Justice to investigate whether big banks are coordinating their debit-card fees in violation of federal anti-trust laws.
Welch has previously worked to pass laws that would reform so-called ‘swipe fees.’ Those are fees banks can charge retailers and customers for each debit-card transaction.
Welch says the federal government should now probe whether big banks have been price signaling, which is a form of collusion.
(Welch) "There’s got to be a cop on the beat to make certain that there’s not market power abuse. The prices should be set by the market, they should be set by competition. They should not be set by four boards of directors sitting around cooking up how they can shake down their depositors and consumers."
But ever since Congress cracked down on high swipe fees last year, Welch says it appears big banks have been signaling to each other their pricing increases.
(Welch) "The big banks have developed this fee-driven model where they use their market power – almost a monopoly – to use ever more devious ways, really, to shake down their depositors and their customers and it doesn’t add any economic benefit to the economy."
Three of the nation’s four biggest banks – Bank of America, Wells Fargo and J.P. Morgan Chase – have recently said they will begin charging new debit-card fees.
Welch says the economy needs more local banks in order to create jobs and help families buy homes, and he says the market should reward the local bank model, which he says competes on service, quality and customer service satisfaction.