Consumer Confidential: Vote set for debit-card fees; investors worry about Wii
Here's your west-end-girls Wednesday roundup of consumer news from around the Web:
-- The battle over debit-card fees is reaching a climax. The Senate is scheduled to vote Wednesday on whether to block the Federal Reserve from capping fees that stores pay banks every time a shopper swipes a debit card. At stake is whether to slash the $16 billion the Fed says merchants pay banks and credit card companies for the 38 billion times consumers use debit cards annually. The Fed says the fees average about 44 cents per swipe, which under a proposal the central bank unveiled last year would be capped at 12 cents. Last year's financial overhaul law ordered the Fed to issue a rule that will take effect on July 21. The Senate vote will be on an effort to delay the regulations for a year and order the Fed and three other agencies to study whether the proposal is fair. Each side claims to have consumers' interests at heart. Merchants say current fees, typically 1% to 2% of the purchase, push their prices higher. Banks say the Fed proposal discounts overhead costs like preventing fraud. Consumer advocates tell me that the actual cost of processing a transaction is closer to a penny, so I think banks would do just fine with a 12-cent cap.
-- Wii'll be seeing you. The stock of Wii maker Nintedo took a tumble after investors were underwhelmed by the company's new gaming console. The demonstration of a prototype at the Electronic Entertainment Expo in Los Angeles on Tuesday left the money crowd disappointed and skeptical. Analysts say it's unclear how successfully the machine would compete against smartphones and tablet PCs. The Japanese gaming giant behind Pokemon and Super Mario says the Wii U will broadcast high-definition video and feature a touch screen controller that can detect motion. All I know is that my kid, a Wii junkie, thinks the new system looks cool. But he has yet to take one for a test drive.
-- David Lazarus