Cap On Debit Card Swipe Fees Survives Senate Vote

The Senate finally voted Wednesday on one of the pressing debates on the floor — cutting on debit card swipe charges.

Central to the debate is the proposed plan to allow the Federal Reserve to slice current charges that merchants need to pay banks every time consumers use their debit card. The Senate’s split decision with a difference of just six votes is a victory for merchants over banks. What’s at stake is the $16 billion annual revenue generated from swipe charges.

Merchants and stores lauded the result of the long-standing Senate hearing while banks and credit companies are still aghast with the decision. The Independent Community Bankers of America, an organized banking group, tagged this Senate rule as “extremely disappointing”.

Senate VoteWall Street acknowledges that the fight for capping fees has ended, at least for now, but lobbyists from their decks swear to continue their crusade.

Democrat Sen. Richard Durbin of Illinois included this federal rule as provision of last year’s financial overhaul law which seeks to cap fees through the Federal government’s intervention. The new Federal Reserve regulation is set to take effect next month. This would dramatically reduce transaction fees from 44 cents down to 12 cents, said officials.

While retailers are celebrating the passage of this regulation, credit card companies and banks continue to mull over the disappointing senate vote turnout. This development in the US banking landscape will definitely affect the whole economic picture.

The Senate failed to reach 60 votes which were needed to halt the passage of this new banking regulation. Of the senators in attendance, 54 voted to block the regulation while 45 voted against.

Quite interesting is non-partisan division of the senate. In fact, two stalwart Democrat Senators, Sen. Durbin of Illinois and Sen. Jon Tester of Montana, fought over the passage of this provision, both, however claimed to protect the interest of small banks and consumers.

The Montanan senator proposed a delay on its passage on the grounds that the regulation still requires further studies especially on its effects on smaller credit unions and financial institutions. Sen. Tester proposed a trial at Montana where he seeks reelection next year. Smaller financial institutions fear that they will not survive the deemed effects of this regulation.

The proposal of Sen. Durbin to exempt companies with less than $10 billion assets prevailed over the delay of its implementation.…

Study Says College Students Don’t View Debt As Burden

As tuition fees continue to rise, college debt is also on the rise, but surprisingly college students don’t consider them as a burden.

According to FinAid.org, students graduating from college will have no less than $23,000 worth of debt after completing a degree. In a survey conducted by Sallie May, the student lending organization, in 2019, merely 17% students pay off credit debt. This means that almost every graduating senior has an average credit card debt of $4,138.

For most of us, just looking at the total amount of debt can be daunting. But for many students, they see debt the other way round. A study conducted at Ohio University noted that debt only make students feel “empowered.” The study was based on the Federal Bureau of Labor Statistics’ database. It surveyed 3,079 students of which most of the respondents were in their mid-20s.

The findings show that the more loans a student has, the better the outlook they have in life. For students, debt has a reassuring effect in their sense of autonomy and increases their self-esteem. Quite interestingly, loans have positive effects on students and are not viewed in a negative way.

You read it right!

College Students Don’t View Debt As BurdenThe finding affirms previous studies that suggest that student loans are seen by students in a positive light. Student loan opens up opportunities for students so they represent something good. The study’s lead author and sociology professor at Ohio State, Rachel Dwyer, admits that it is not completely clear how debt can give positive reinforcement for students. According to her, perhaps students consider debts associated with education as worthy investments.

Furthermore, Dwyer also said that student credit-card debts are also seen as investments for the future. The majority of students use their credit cards for educational purposes such as buying books or purchasing some good clothes for school.

The study says that students consider debt as worthwhile investments for their future and a transition to adulthood.

But as students begin to realize the consequences of having debts, the glow slightly fades. The study noted that among graduates, aged 28 to 34, a majority have reported signs of stress over the money they owe. Perhaps by this time, students realize that payment is challenging and that their salary is not as grand as they previously thought.

According to Dwyer, the burden of repayment bites as soon as they start paying off their debt.

Although the students’ positive view on educational debt is generally good, there’s a need for caution, said the authors. Students may think that their future earnings are enough to cover their entire debt, thus their debt keeps on compounding. They may find therefore find themselves in a predicament where their expected salary is not enough to pay off their debts. This situation presents only one winner, and that is the lender.…