Banks are preparing to lose a big chunk of their revenue as new regulations are set to hit Thursday, December 15. According to a Reuters press release banks can lose up to 50 percent of their debit fees.

UPDATE: Watch the current meeting live here.

Tomorrow’s announcement is bound to send a shock to banks’ capital, but it is not a new concept. In mid-July U.S lawmakers had agreed to require limits on debit card fees. As soon as the Dodd-Frank financial reform bill was signed banks voiced their concern over various regulations set to take place. Interchange fees, in particular, were hotly debated among regulators and banks.

Read: Government Approves New Limits on Debit Card Interchange Fees

Check Out: How The Debit Card Reform Can Affect Consumers

The U.S Federal Reserve sees this as step benefiting consumers and retailers. Currently, every time a customer swipes a card and enters their pin the retailer is charged a processing fee or interchange fee. The hope is that lowered interchange fees will result in lower prices on goods and services sold at various stores throughout the country. Visa Inc. and MasterCard Inc. will be directly affected by the new regulations and are predicted to offset their losses by charging banks.

Some analysts predict that it will be the consumer that is ultimately hurt from this legislation, but banks will have a hard time figuring out a way to gain more revenue due to other protective regulations.

Thursday’s Announcement

The approval of this plan came in mid-June, but the announcement of how the Fed will actually restrict interchange fees will come tomorrow. Many are interested to hear what the Fed has to say due to the secrecy surrounding the rule so far. Reuters reports that “Thursday will spell out exactly what the fee limit will be, or whether it will seek comments on two or three proposals for how limits could be set.” This means banks tomorrow banks will find out if they have to continue bracing for the blow or it will come and they will lose approximately 9 billion dollars worth of revenue.

Do you think eliminating interchange fees is a good idea?

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  • Miki

    It is a very bad idea! They tried to do that in Australia, and it didn’t work. Prices stayed the same or went up, banks started charging annual fees for the cards, and customers got shafted.

  • Dave

    um you dont raise prices when profit margin goes up. you raise prices when porfit margin goes down. so your statement about prices going up because of decreased processing fees makes no sense. also, you wont see a difference in prices to consumers, but more so in new hirings and more small business spending.

  • overdue

    great idea! so banks will pass the fees on the consumer and the consumer will keep their money out of the banks in return. what a great concept. paying with cash. amazing. so banks will cut benifits and points on their cards. big deal. im a small buisness owner and i spend over 1000 a month on debit card fees. how lazy have we become? use cash people. specially for small priced items. all the interest adds up and out weights those so called “perks” you get by using  a card.

  • Jody

    All of this started with “perks” and “points” offered to customers….all financed by retailers. If I told you how much I pay a month in “credit card fees” you wouldn’t believe me. I can’t raise my prices, because I need to compete with large box retailers and strong chain outlets. This is where retail will be going soon…all retailers NOT accepting credit cards…or the “checks acceptable.” No matter how you look at it…..the economy was better when we bought what we could afford. Lay-a-way worked better than outrageous credit card fees……and people bought quality things that didn’t break. I own and operate an independent gasoline/c-store. My credit card fees monthly are almost 4K. 50K a year, in credit card and swipe fees. The whole thing is obscene.