BPI Launches New Advertising Campaign to Deter ‘Chain Store Charity’

Washington, D.C. ­- The Bank Policy Institute launched a major new advertising campaign today called "Chain Store Charity". The advertising campaign exposes how giant retail chain stores - not consumers - are profiting from Regulation II, which caps the amount banks can charge for debit card interchange fees. The campaign targets Washington, D.C. and select national media markets, and features an educational website examining the harms caused by price fixing of debit card transactions.

"In 2011, giant chain stores like Walmart successfully lobbied policymakers to lower debit card transaction fees by promising to pass the savings on to customers. However, these mega-retailers failed to uphold their promise, and 98 percent of surveyed merchants either maintained or increased existing prices," stated BPI President and CEO Greg Baer. "Instead of saving consumers money, the cap under Regulation II increased mega-retailer profits, reduced access to free checking accounts, undermined investments in new fraud prevention technology and threatened the viability of struggling community banks. Our ad campaign unmasks mega-retailers' false promises to help consumers and demonstrates how Regulation II is bad policy that amounts to nothing more than a handout to giant chain stores."

Banks facilitated $4.2 trillion in debit transactions in 2021, according to the most recent Federal Reserve data. Despite benefiting significantly from debit card services through higher sales, more expansive customer reach, faster checkouts, enhanced security, easier recordkeeping and happier customers, giant chain stores want to further reduce the costs they pay for these benefits, potentially leading to diminished services. After Regulation II was enacted in 2011:

• 75 percent of merchants retained their prices and 23 percent increased prices, according to a merchant study by the Federal Reserve Bank of Richmond and Javelin Strategy and Research. Only 2 percent of surveyed retailers decreased prices.
• Merchants swiped $42 billion in profits over the first five years, according to estimates by the Electronic Payments Coalition.
• Access to free checking accounts declined from being offered by 60 percent of banks to less than 20 percent.
• Banks subject to the new regulations doubled their checking account fees from less than $4 to $7.
• Minimum balance requirements for interest-bearing checking accounts increased by 55 percent.
• Small community banks exempt from the new regulation saw a 16 percent decline in revenue for debit transactions routed over single-message networks.

The website examines the implications of Regulation II, offers background information on how debit cards work and offers visitors the opportunity to commiserate with retail giants for their plight of having to pay for debit card processing - from which they derive significant benefits - by sending a sympathy card to the National Retail Federation and the Retail Industry Leaders Association.

Just say 'NO' to Chain Store Charity and learn more by visiting chainstorecharity.com

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About Bank Policy Institute.

The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

Media Contact

• Austin Anton, Bank Policy Institute, [email protected]