Newsroom

April 06, 2011

Frank backs debit rule delay after Fed letter

April 7, 2011 – A statement Tuesday from Rep. Barney Frank, D-Mass., that he supports delaying the Federal Reserve Board's proposed rule capping debit interchange fees made the rounds at news organizations Tuesday and was still circulating yesterday.

Frank's comments, according to the reports, are that he supports a delay to allow a study of the rule's impacts now that the Fed (see letter) has said it won't meet the April deadline for publishing it in final form. In his view, this is the only Dodd-Frank Act provision that needs change. His statement appeared on news blogs such as WSJ.com's Washington Wire and Politico.com's Morning Money, and in newswire reports.

The interchange rule was proposed under the Durbin amendment to the Dodd-Frank Act. Durbin has been speaking out against efforts to postpone implementation of the fee cap, at one point suggesting – erroneously, it turns out – that the Consumer Federation of America also opposes delaying it. (CFA says it is neutral with respect to the delay proposal; it circulated a one-page summary of its views this week to correct the record.)

Last December, Frank raised several concerns about the Fed's proposed rule in a comment letter, warning that "if not properly crafted, [it] may have unintended consequences for consumer choice, the protection of consumer information, and Congress' intent to reduce burdens on community banks, credit unions, and government benefit programs."

Yesterday, during a Senate Banking subcommittee hearing on community banking, Sen. Bob Corker, R-Tenn., asked regulators what they thought of the debit interchange measures. All said they had expressed concerns about the proposed rule and submitted comments to the Fed.

The Fed's proposed rule would be delayed to allow further study under S. 575, providing a two-year delay in implementation, and H.R. 1081, providing a one-year delay. The language of S. 575 has also been filed as Senate amendment 267 to S. 493, a small-business reauthorization bill awaiting Senate action.

NAFCU is calling on credit unions and their members to keep working to garner cosponsors for these measures. Letters can be sent online by credit union members at SaveYourDebitCard.com; and by credit unions via Contact Congress. To call lawmakers, dial the U.S. Capitol switchboard at 202-224-3121.