The U.S. Department of Justice has launched a review of statements major bank banks and their trade associations made before rolling out new consumer debit card fees that drew the ire of customers.
The antitrust concerns arise out of a potentially coordinated effort by financial giants including Bank of America and Wells Fargo to begin charging their customers a monthly fee for using debit cards to make purchases.
The Department of Justice is reviewing the statements and actions by banks and their trade associations regarding possible increases in consumer fees for using debit cards, Assistant Attorney General Ronald Weich wrote in a Nov. 16 letter released Tuesday.
After Popular Backlash, Banks Retreat
Banks, many of which have dropped these new charges after customer backlash, had argued that the consumer fees would make up for lost revenue generated by retailers whose customers pay with debit cards.
The Dodd-Frank financial reform law had given the U.S. Federal Reserve power to regulate the fees that businesses pay to banks when customers use a debit card. The Fed capped these fees at 21 cents per transaction to more accurately reflect the processing costs banks incur.
The review from the Justice Department was requested in October, when a group of House Democrats led by Rep. Peter Welch of Vermont sent a letter to Attorney General Eric Holder outlining their antitrust concerns.
There is clearly no problem with banks making independent business decisions based upon the landscape as they see it, Welch's October letter read. Antitrust issues are raised, however, if they are attempting to facilitate group decisions on their prices, terms and conditions.