Debit Fee Investigation a Dud: Lawyers

NEW YORK (TheStreet) -- The U.S. Department of Justice is reviewing claims that banks colluded to impose debit card fees for retail customers, but the legal push will only result in a few lawmakers showing public concern, legal experts say

Banks do not appear to have violated any anti-trust laws and were merely responding to competitive pressures in the market, antitrust professionals argue.

"It is not an anti-trust violation to see something happen in the public domain and react to it," Richard Brosnick, an attorney at Butzel Long, who specializes in anti-trust litigation and counseling. "One bank publicly announced that it would impose a fee and it is reasonable to assume that others decided to follow."

It is unclear on what information the Department of Justice is currently basing its review on. Unless there is an informant or some other form of evidence, the department would have very little to support an actual investigation, lawyers say.

Right now it appears to be merely responding to a letter from Congressman Peter Welch (D- Vt.,) that requested them to investigate whether banks colluded to raise fees.

Lawrence Remmel, a partner at law firm Pryor Cashman, says the review is likely just a formality. "I think the actions by Congressman Welch were entirely appropriate and as a matter of giving due respect to other government agencies the Department of Justice should respond to it. They are taking it seriously and examining the facts," Remmel told TheStreet.

"But if you and I were walking down the street and it begins to rain and you open up your umbrella and others do so, you are not acting in concert," he said. "You are simply reacting to a commonly experienced event."

Big banks particularly Bank of America came under attack for proposing to charge customers a monthly fee for debit-card purchases. Banks saw it as a way of recovering billions of revenues that they stood to lose following the implementation of the Durbin Amendment- new regulations that limit the fee they could charge retailers for processing debit-card transactions.

However, banks dropped their plans to charge the fee following a nationwide backlash , with customers threatening to take their business elsewhere. JPMorgan Chase(JPM) and Wells Fargo(WFC) were among the first to announce they will withdraw the fee, after which Bank of America(BAC) had no choice but to abandon their debit fee proposal.