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Florida state legislator wants to ban debit card fees

State Rep. Jeff Clemens, D-Lake Worth, has filed a bill that would ban banks from charging fees on debit cards.

Debit card fees are one of the issues that has protesters from the Occupy Wall Street movement rallying all over the country — including in Florida. Cities across the state and country have been mobilizing for weeks now in protest of the country’s rising income inequality, and have argued that the debit card fees are unfair considering that large banks in the U.S. are currently seeing their highest profits since the beginning of the recession.

Clemens’ House Bill 375 would prohibit “certain financial institutions from charging specified fees for use or holding of debit card by consumers” and provide “administrative penalties” if a bank does decide to charge those fees. According to a recent press release, it would make it unlawful “to charge or impose a dormancy fee, an inactivity fee or charge, or a service fee with respect to the use or holding of a debit card by a consumer.”

Clemens tells The Florida Independent that he has been considering this legislation since Bank of America first announced it would be charging fees on debit cards. He said that even though the legislation was not a direct result of the protests, he says his “outrage is similar to the Occupy Wall Street folks.”

Clemens also says that “what really bothers” him is that banks insisted on everyone moving into a “paperless and cashless economy.”

“Now that we’ve bought into their promise of free, easy access to our own money,” he says, “they want to charge us for it.”

Conservatives have adopted a new meme that blames the recent fees on federal regulation. Along with Sen. Marco Rubio, R-Fla., GOP Senate hopeful Adam Hasner has said that banks were “forced to charge customers new fees due to the negative and costly requirements associated with the Dodd-Frank financial overhaul law, in particular the ‘Durbin Tax.’” Dodd-Frank legislation was a response to the country’s financial crisis that many economists say was partially caused by lax regulations on financial institutions.

Clemens says the claim that financial regulations are to blame is “ridiculous.”

In a recent press release, he explains:

Seeking to please shareholders and continue to pay exorbitant salaries, extremely profitable banks have taken to blaming federal legislation that limits the amount they can charge for so-called ‘swipe fees’ to retailers,” said Representative Clemens. “But no one is buying the weak explanation.

“No one is weeping for an industry that makes billions in profits and in some cases, doesn’t pay taxes,” Clemens added.

Wells Fargo and Bank of America were among the first banks to announce monthly fees for the usage of debit cards.

Bank of America has paid no federal income tax for the past two years, claiming losses in its federal filings. Meanwhile, they have pledged to eliminate 30,000 jobs over the next few years, adding to our country’s unemployment woes. Wells Fargo posted a $3.8 billion profit in the first quarter of 2011, and a $3.73 billion profit in the second quarter.

“The greed of these institutions knows no bounds,” Clemens said. “As soon as you try to end one deceptive or immoral practice, they come up with two more.”

Clemens says that politicians blaming regulation instead of the banks for the fees are “not there for the right reasons.”

“I don’t think they care anymore,” he says.

Clemens also says to “expect to hear the argument that state’s cannot regulate federal banks.” He says, however, that “a recent U.S. Supreme Court case (Cuomo v. Clearing House Association), [which] granted the New York Attorney General oversight over practices of certain federally chartered financial institutions” is grounds for the legislation.

In 2009, the U.S. Supreme Court ruled in Cuomo that federal law did not preempt states from enforcing their own laws on national banks.

According to The Miami Herald, it’s not clear whether Cuomo will be enough to ensure Clemens’ law can be enforced. According to Anthony DiMarco, a lobbyist for the Florida Bankers Association, “the state cannot impose the law because of the country’s longstanding dual banking system.” He told the Herald that “state banks comply with state law and a few national regulations, he said, and national banks answer mostly to federal regulators like the FDIC… [which means] big banks are allowed to charge fees under federal law.”

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