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Hotel operators debate charging new fee under Durbin Amendment

As a result of the controversial Durbin Amendment, hotel operators are debating instituting a new fee for paying with plastic, adding to already complex hotel statements.

The Durbin Amendment, a provision of the 2010 Dodd-Frank Act that caps the amount a bank can charge a merchant to process a debit transaction, was intended to allow merchants to recoup some of the fees paid to card processors.

“On the other hand, hotels face a dilemma because consumers are likely to object to paying a fee for something that was previously free (or at least seen as free, since the cost of card fees was built into the cost of rooms, food beverage and services,” Robert E. Braun, a hotel lawyer, said, HotelLaw reports. “Hotels will have to make the decision to charge, or not charge, card transaction fees. Hotels could benefit from the additional revenue, but they will add yet another line to an already complicated checkout bill, which could alienate some guests.”

Additionally, a reduction in fees to consumers who pay with plastic has forced banks to recoup revenue losses in other ways, such as charging new fees in other areas.

“Banks, in turn, are expected to recover some lost income from their customers—both individual and institutional,” Braun said, according to HotelLaw. “Hotels could face additional banking costs, as well as the possibility that some consumers may be stretched.”

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