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Barney Frank Objects to Fed's 12-Cent Cap on Debit Card Fees

Dodd-Frank co-author says the amount card providers are allowed to charge is too low to cover their costs, and that fees ought to be left to the free market.

Rep. Barney Frank, primary author of the Dodd-Frank financial reform bill, which in part requires regulators to limit the debit card swipe fees banks and card companies can charge merchants, objects to the 12-cent cap on fees the Federal Reserve came out with last week. "The amount the credit card companies are allowed to charge is too low," he told CNBC's Maria Bartiromo in the clip below (nine minutes into the video). "It does not reflect the full cost of all that you have to do if you're running a credit card operation and unfortunately the evidence we've seen elsewhere is the consumers don't get any benefit from this."

Frank also said he doesn't think the Durbin Amendment's restriction on interchange fees has anything to do with financial reform. "I would prefer that this was left totally to the free market," he said. He also said, though, that he believes card companies brought this on themselves with legislation 20 years ago that prevented merchants charging for the use of credit cards.

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