TALLAHASSEE — A House Democrat disgusted by big banks and their new monthly fees for using debit cards proposed Monday to make those charges illegal for Florida customers.
It may be a dream for angry consumers, but it begs a few questions. The biggest being, can it even happen?
Lake Worth Rep. Jeff Clemens says yes. His bill would prevent banks from imposing a dormancy fee or service fee on customers using debit cards.
His idea comes amid national frustration against corporate America and mammoth banks. Bank of America, for instance, will charge customers who use debit cards for purchases a $5 fee each month starting in January. Other banks considering charges in parts of the country include SunTrust, Regions Financial, Chase and Wells Fargo.
"They sold us on the idea that we were going to move to a cashless society and waited until we got rid of our checkbooks and stopped carrying cash and sprung fees on us," said Clemens, an energy performance contractor and former journalist.
Clemens cites the 2009 U.S. Supreme Court case Cuomo vs. Clearing House Association, in which the court decided federal law did not preempt states from enforcing their own laws in cases against national banks.
But Anthony DiMarco, a lobbyist for the Florida Bankers Association, says the state cannot impose the law because of the country's long-standing dual banking system.
State banks comply with state law and a few national regulations, he said, and national banks answer mostly to federal regulators like the FDIC. Big banks are allowed to charge fees under federal law.
"Generally we are against bills that give a competitive disadvantage to one group of banks over another," he said. "Potentially if a state bank wanted to charge this fee they wouldn't be allowed to."
Plus, it's up to the customer whether to stick around for fees.
"Why does the state feel the need to regulate a fee that's completely avoidable?" said Greg McBride, Bankrate.com senior financial analyst.
The banks say the fees are to offset losses created by a new federal law that, among other things, capped fees banks could collect from merchants when customers swiped their debit cards. The cap will result in a $6 billion cut for banks and credit unions, said Trish Wexler, Electronic Payments Coalition spokeswoman.
If Clemens' idea is law, "consumers are either going to lose their debit cards or they're going to pay another way," she said.
Clarification: Chase and Wells Fargo are testing monthly debit card fees on accounts in select markets but not in Florida. An earlier version of this story was unclear on this point.