proposal by the Federal Reserve to lower the debit card interchange fee cap will harm small financial institutions and consumers, as history has shown us with similar legislation. This is the latest in a series of ill-conceived efforts to restrain normal price settings by debit and credit card issuers. Similar bills, like the Durbin Amendment, have been shown to harm local financial industries that so many consumers rely on. When interchange fees were initially lowered under the Durbin Amendment, financial institutions made up these losses in other ways, usually by eliminating the contraction of fee-free services and rewards programs. Consumers did not see any benefits from this program, and further restrictions only exacerbate a failing effort.

Isaac Schick is a policy analyst at the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.