Like most of us, I want to see Congress pass a strong financial reform bill. I want it to have teeth. End too big to fail. Curtail systemic risk. Restrain leverage. I want to let Wall Street know that it is, as one Fool put it, sunset for the sociopaths.

And for the most part, it does. But for one section of the bill, what began as a valiant attempt to score points for consumers and small businesses may end up haunted by unintended consequences.

I'm talking about the regulation of debit-card interchange fees -- 1%-3% licks off the top of every purchase you make with a debit card, paid by merchants.

A little off the top
Here's how it works: Say you make a $100 purchase at the grocery store, paid on your debit card. For the privilege of processing the transaction, the grocer owes the card processor -- usually Visa (NYSE: V) or MasterCard (NYSE: MA) -- between $1 and $3 in interchange fees (plus a few other nominal fees for service). That's the cost of doing business. Visa and MasterCard then remit substantially all interchange fees back to the bank that issued you the card. Today, Citigroup (NYSE: C), Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), and Wells Fargo dominate this market.

For retailers with sliver-thin margins, interchange fees can be deadly serious. Costco (Nasdaq: COST), for example, doesn't allow customers to pay with anything other than cash, check, pin-based debit (different than so-called signature debit) ), its own self-branded credit cards, or American Express (NYSE: AXP), which negotiated a special deal in exchange for exclusivity in 1999. That lets Costco avoid most interchange fees and keep retail margins extremely low, which is how its business model works.

But most retailers could never get away with this, and many get gutted by interchange. Basically, anything with less than 3% margins can have all profits wiped out after interchange.

So merchants stomped their feet loudly, and Congress listened. Seeing the card market as the near monopoly that it is, the new financial reform bill will allow the Federal Reserve to determine what is "reasonable and proportional to the actual cost incurred" when it comes to debit-card interchange fees. Undoubtedly, the Fed will determine that "reasonable" is a fraction of what's charged today.

One fee, two fee, red fee, blue fee
Who wins here? It's hard to tell, and not as obvious as it appears. You might think retailers will score big. And they may. But the retail industry is so ferociously competitive that any savings merchants reap from lower interchange fees will probably erode fairly quickly.

Then the customer must win, right? Not necessarily. There are several historical examples of governments forcefully tweaking interchange fees. Few provide much hope. As the Government Accountability Office found of Australia's interchange-fee experiment last decade:

Since Australia's regulators acted in 2003, total merchant discount fees paid by merchants have declined, but no conclusive evidence exists that lower interchange fees led merchants to reduce retail prices for goods; further, some costs for card users, such as annual and other fees, have increased.

I'd focus on that last sentence. The best enlightenment of this proposal's unintended consequences comes from bank analyst Dick Bove, who warns, "You're going to get a letter from your bank saying you now have to pay $1 to $15 a month to pay for this bill."

Now, I know what you're thinking: "Damn those greedy banks!" But this is totally justified.

Consumers have come to expect free checking as a birthright. But banks aren't doing this out of charity. They justify free services by using the cash flow from other areas you may never see, such as interchange fees. That's why they're always begging you to use your debit card more often (check out this ad).

But as soon as interchange fees dry up with the new regulations, banks have to find replacement revenue. You can't blame them for doing this. Believe me -- they aren't making net interest profit on the guy who keeps $500 in his checking account. They have to find a way to make consumer checking profitable. And if it isn't through interchange, then added monthly fees on checking accounts are both assured and entirely defensible.

Careful what you wish for
So in Congress' well-intentioned plan to spare merchants and consumers from the burden of interchange, the end result will likely be a simple shuffling of costs. Unfortunately, it's you, the consumer, that gets shuffled the bad hand and could end up paying the price.

Behold the power of unintended consequences.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. American Express and Costco Wholesale are Motley Fool Inside Value picks. Costco Wholesale is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Costco Wholesale, and has a disclosure policy.