The large amount of changes to the banking and credit card lending industries seen in the last several months are largely a reaction to increased federal regulation, and the U.S. Secretary of the Treasury believes that the changes put in place by lawmakers will overcome increased costs for consumers.
U.S. Treasury Secretary Timothy Geithner recently said that he believes the numerous regulations on the banking industry put in place by lawmakers over the last two years will benefit consumers and help reduce credit problems in the end, according to a report from CNN. Currently, the numerous increased charges and tighter lending restrictions are considered a sort of pushback against these regulations – essentially banks testing lawmakers to see what they can get away with.
However, Geithner vowed that the response from regulators will be even more significant if the trend continues, the report said.
Much of the most recent resistance from the banking industry is in response to a new rule that limits the amount banks can charge businesses for processing debit card purchases to 21 cents instead of the previous 44 cent average.