Some time ago Ben Bernanke's right hand man (and it certainly goes both ways), better known as the guy who is the gatekeeper to the entire shadow banking system, Jamie Dimon railed against debit interchange fees, claiming they are "counterproductive", represent "price fixing at its worst" and are "downright idiotic." Dick Durbin, who introduced the interchange fees amendment responds in kind. "I recognize that Chase will likely see decreased revenue from interchange reform, but I urge you to keep some perspective. Last year Chase had $17.4 billion in profits — up 48 percent from the previous year - and a 15 percent profit margin. Your own personal compensation "jumped nearly 1,500 percent to $20.8 million in 2010" according to Reuters. In contrast, middle-class American families are struggling to get by in a tough economy — an economy that went south because of the banking industry's unregulated excesses. There is no need for you to threaten your customers with higher fees
when you and your bank are already making money hand-over-fist. And
there is no need to make such threats in response to reform that simply
tries to spare consumers from bearing the cost of interchange fees that
are anticompetitive and unreasonably high...In the coming weeks I am confident the Fed will produce a reasonable set of reforms that will enhance the efficiency, competitiveness and fairness of the debit system. This will neither be "counterproductive" nor "idiotic." It will be good news for all Americans." Poor Dick apparently does not know that you don't call out Jamie's BS - it only leads to exponential escalation in the M.A.D. doctrine until Jamie finally blows his top and threatens the world with an extinction level event if the ROI for his "shareholders" does not grow by at least 100% Y/Y? But at least this response does set the precedent that someone voicing an opinion contrary to that of JP Morgan does not lead to a horde of satanic demons flying out of a hole in the ground and dragging the offender deep into the bosom of Hades.
Full letter courtesy of the WSJ:
h/t Cate Long