More lawmakers cautioning Fed on interchange rules

By Peter Schroeder – 12/30/10 03:55 PM ET

The number of lawmakers cautioning the Federal Reserve on its proposed rules limiting the fees banks can charge on debit cards continues to grow, as a bipartisan group of high-profile lawmakers fret over the rulemaking.

Thus far, 10 Republicans and eight Democrats have either warned the Fed to tread lightly on the interchange fee rules, or opposed them outright. That includes the two titular sponsors of Dodd-Frank, retiring Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.). Both have cautioned that unintended and overreaching consequences could result if rules are not carefully crafted by the central bank.


Sharp Comments Flow into Fed in Wake of Interchange Proposals

From: Digital Transactions

Dec. 30, 2010

The comments are flowing in to the Federal Reserve Board in the wake of the board’s controversial proposals to set a 12-cent cap on debit card interchange, ban exclusive network agreements on debit cards, and give merchants more freedom to direct the routing of debit transactions. To a large degree, the 35 comments posted to date on the Fed’s Web site reflect the run-up to the initial proposals the board revealed two weeks ago, with merchants strongly endorsing lower interchange and financial interests fiercely opposed (Digital Transactions News, Dec. 16).


Happy Birthday Wishes to the Data Quality Act

December 21, 2010 marks the tenth anniversary of the Data Quality Act (DQA), also known as the Information Quality Act, 44 U.S.C § 3516, note.

The DQA has deep roots developed over nearly a half-century as the result of a seed planted during the Johnson Administration which germinated in the Nixon Administration, was watered by the Carter Administration and whose product was harvested by the Reagan Administration, made available to the public in the Bush I Administration and subsequently enhanced by the Clinton Administration and promoted by the Bush II and Obama Administrations. See: and


Senators Express Concerns Over Debit-Card Fees

Source: Wall Street Journal

By Maya Jackson Randall

A bipartisan group of U.S. senators is urging the U.S. Federal Reserve to make sure that consumers aren’t hurt by new rules that would limit debit-card transaction fees.

In a recent letter to Federal Reserve Chairman Ben Bernanke, the senators said they fear that new rules on debit card “interchange” fees could replace market-based pricing with a government-controlled system.

They also expressed skepticism that interchange fee limits will benefit consumers. Price-fixing hurts consumers, they said.


Fed Said to Unveil Debit-Card Fee Limits Next Week

WASHINGTON (Reuters) – The Federal Reserve is expected to unveil a proposed rule next week that would limit the transaction fees that banks can charge retailers when a customer uses a debit card, according to two industry sources familiar with the matter.

The rule, mandated by the Dodd-Frank financial reform law enacted in July, is expected to be on the agenda for a December 16 board meeting, according to the sources. Federal Reserve officials have only said publicly that a rule is expected soon.

Banks are eager to learn the details of the proposed rules, which will give them a better idea of how much it will cut into their profits.