The US Senate defeated an attempt by big banks to derail financial reform scheduled to take effect next month that will bring some overdue common sense to the debit card fees banks are allowed to charge merchants.

Under the reform, starting July 21, rather than a percentage charge, swipe fees paid to the biggest banks will be set at a flat 12 cents per transaction — a huge 75% reduction that will benefit low income people most, who don't even use such banking services.

The average swipe fee for debit card transactions in 2009 was 44 cents. The Federal Reserve has determined average processing costs are really around 4 cents per transaction.

Retailers raise their prices on all goods to recoup these fees, thus impacting poorer people most.

(READ the story in the LA Times)