Newsroom
Mesack: Fed’s interchange proposal ‘attempt to solve non-problem'
NAFCU Senior Vice President of Government Affairs Greg Mesack penned an op-ed for CU Insight on the Federal Reserve’s recent proposal to slash debit interchange fees. In the op-ed, Mesack called the proposal a “proposed solution to a non-problem" and remarked that “[t]heir own data points to the harm of artificial price caps on interchange fees.”
In the Fed’s meeting on debit interchange in October, Board staff called the small issuer exemption in the Durbin Amendment a success. Mesack countered by explaining that since the implementation of the Durbin Amendment, which capped debit interchange fees beginning in 2011, debit interchange fees have not kept pace with inflation or outright fallen.
“This exemption is a failure,” he wrote. “There’s no sugar coating it."
In addition, he called out the Fed’s decision to only raise the fraud prevention component of debit interchange fees to address rising fraud concerns.
"Mitigating fraud, and funding secure card programs, requires more than evaluating only a narrow subset of costs,” Mesack explained. “The Fed needs to stop evading a wholistic consideration of the funds needed to operate card programs and limit fraud in the debit payment network.”
Mesack concluded by urging the Fed to put consumers over greedy retailers and to “rise above retailers’ misleading claims and broken promises.”
NAFCU will continue working to protect noninterest income for credit unions.