A look at the Federal Reserve's timing on card fees

New Debit-Card Fee Rules Hit Hard

The new restrictions, most of which won't be made final until April 21, aim to cap the amount of money that debit-card issuers can charge merchants for so-called swipe fees. Banks would face a seven-to-12-cent-per-transaction cap on the interchange fees under either of the two proposals unveiled Thursday. That represents as much as an 84% drop from the current average of 44 cents. Analysts had been expecting a drop of up to 60%.

"Nobody expected it to be this draconian," said David Robertson, publisher of credit-card industry newsletter the Nilson Report. One bank executive said the cut was larger than the company's worst-case scenario. Banks, he said, will "push back."

The credit card companies don't keep the fees, but the higher fees make the cards attractive for banks, which is why Visa (V) and Mastercard (MA) got clobbered yesterday on the news.

This policy change comes as part of the Dodd-Frank financial "reform" package; it is a regulatory power newly granted to the Federal Reserve by Congress (wink wink, nudge nudge).

Now to the graphs. These graphs go back to 1980 to capture the big increase in credit, but data going back to 1968 shows that there were no year-over-year declines before 2008.