Fed takes up debit fee rule June 29
June 22, 2011 – The Federal Reserve Board meets in open session June 29 to consider a final rule implementing the Dodd-Frank Act provisions on debit interchange fees, with the final rule incorporating a fraud-prevention adjustment or detailing the Fed's future plans in that area.
The Fed is due to implement its final fee-cap rule by July 21. NAFCU has urged that the debit interchange fee not be set so low that credit unions cannot recoup the true costs of offering debit card services and make a reasonable return on them. It has also urged that fraud prevention costs be factored into the final debit fee. The Fed's final rule could also address network exclusivity and merchant routing restrictions.
The Fed held a conference call last week with federal regulators, including NCUA, regarding their views on major elements of the debit interchange rule. It has also received additional letters from members of Congress. Sen. Bob Corker, R-Tenn., who noted his opposition to price-fixing, urged that the final rule address all the costs issuers incur in the offering of debit cards. Sen. Patrick Leahy, D-Vt., urged that the rule reflect the intent of Congress in including an exemption from the fee cap for issuers with less than $10 billion in assets.
Reps. Petro Pierluisi and Donna Christensen, Democrats representing Puerto Rico and the Virgin Islands, shared their concerns regarding the impact of the fee cap on low-income card users, and on other elements of the proposed rule. (The Fed has posted all comments received online.)
The Fed's proposed rule, released in January, set a debit interchange transaction fee cap of 12 cents, which would result in a reduction of up to 80 percent in card issuers' debit interchange fee income.
The Fed's June 29 meeting was announced via a notice on the board's website Tuesday. Set for 3:30 p.m. at the Fed's Washington, D.C., headquarters, the meeting will also be webcast for the public.
Those wishing to attend the meeting in person are asked to provide notification by close of business June 28. That notification should include the person's name, date of birth and social security number or passport number. Dial 202-452-2472, or register online.
Those viewing the webcast will be able to access the link to the meeting and the meeting documents 20 minutes before the start of the meeting at www.federalreserve.gov. No registration is required.
Get daily updates.
Subscribe to NAFCU today.