House Democrats seek probe of debit fees

House Democrats Thursday called on the Justice Department to investigate whether large banks are coordinating new fees in violation of antitrust laws.

Rep. Peter Welch of Vermont said public statements by big banks and trade groups raise questions about whether financial firms have colluded on fee increases to make up for revenues lost because of a new cap on debit card swipe fees.

The letter is the latest battle over the Durbin amendment, which went into effect on Oct. 1 and cut by nearly half the amount banks can charge merchants when customers swipe their debit cards.

The amendment has been a boon to retailers and an aggravation for the banks who stand to lose billions of dollars in annual revenues.

Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. recently announced they are testing or planning new monthly debit card fees.

Welch and other Democrats sent a letter to U.S. Attorney General Eric Holder that outlined examples of the American Bankers Association, the Independent Community Bankers Association and other trade groups saying new fees are inevitable.

"We are concerned that communications between banks and bank associations that may amount to price signaling or collusion have occurred in the wake of Congressional action to reform debit card swipe fees," the letter said.

Justice Department spokeswoman Gina Talamona said the agency received the letter and will respond as appropriate.

JPMorgan Chase and Bank of America declined to comment. A Wells Fargo representative was adamant the company's fee decisions were independent.

"We are trying to cover the cost of providing debit card services," said Lisa Westermann, a spokeswoman for the bank.

Bank of America's new fees on debit card use begin early next year, while JPMorgan Chase's pilot is already in effect. Wells Fargo's pilot begins Friday.