3 ETFs Impacted By Durbin Amendment

The Durbin Amendment seeks to reduce credit and debit card networks from imposing anti-competitive restrictions and high transaction fees on small businesses, merchants and government agencies and could provide positive support for some large-cap and regional banks. 

More specifically, the Durbin Amendment is aiming at preventing both MasterCard (MA) and Visa (V), who constitute roughly 80 percent of all credit and debit card transactions, from continuing to increase debit card interchange fee rates.  To regulate the fee structure, the amendment would direct the Federal Reserve to issue regulations to ensure that interchange fees imposed are “reasonable and proportional” to the cost incurred in processing the transaction.  Read more of this post

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3 Financial ETFs To Benefit From Interest Rate Jumps

Since the beginning of the month, interest rates have been on the rise pushing yields on 10-year Treasurys over 3.5%, their highest level in seven months, boosting the appeal of the Financial Select Sector SPDR (XLF), the iShares Dow Jones US Regional Banks Index Fund (IAT) and the KBW Bank ETF (KBE).

The most recent implementation of QE2, which includes a $600 billion quantitative easing program and keeping short-term interest rates at near record lows, has resulted in increases in long-term interest rates, resulting in steeper yield curves. Read more of this post