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No, charging us to use debit cards is not “robbery”

In October of 2011, Lloyd Constantine, a “commercial litigator” and author, published an OpEd in The New York Times in which he described the fees banks were proposing to charge for use of debit cards as “…illegal transfers of wealth from consumers to banks…” and implied that the Fed — or someone — really ought to do something about it (because, after all, the banks were acting “illegally” and, therefore, literally robbing their customers).

I am not a fan of debit card fees and generally avoid them by not using my debit card in situations where the fees would apply — which means, as old fashioned as it may seem, that I still walk around with some small amount of real cash spending money in my pocket.  And I am not generally a fan of the big banks in this country and think many of their business practices fall at the sleazy-but-legal end of the spectrum of possible behavior even when they have managed to avoid actual illegality.

Nonetheless, it alarms me when people start talking about transactions in a free market — that is, transactions in which people can choose whether or not whatever price they are paying is worth what they are getting in return — as “robbery”.  That notion leads to places I don’t want any of us to go…

I wrote this in response and sent it to the Times‘ editors.  It was not published.

8 October 2011

To assert that banks charging for use of debit cards is “robbery” (“Charging for Debit Cards Is Robbery”, Lloyd Constantine, 8 Oct) implies that consumers have some kind of property right to such use and that the banks, therefore, have a moral obligation to expend their own resources on the consumers’ behalf in order to provide that service.


Regardless of how it may or may not benefit the banks themselves, the ability to pay for purchases with a debit card is a service of convenience that a bank provides its customers; and they have every right to charge for it at whatever rate they choose.

If you don’t want to pay their fees, then don’t make use of their service: either switch your business to some other bank that charges less or forego the convenience by going back to writing checks and paying cash.

© Copyright 2011, Augustus P. Lowell

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