CRE Files Debit Interchange Comments

The Center for Regulatory Effectiveness filed comments on the Federal Reserve’s Proposed Rule instituting price controls on debit interchange.  The comments explained that the NPRM failed to adequately analyze the small business impact of the proposal.  For example, small business debit card holders would likely have to pay fees and/or receive reduced benefits if the rule is adopted as proposed.  The Board’s tentative decision to set debit interchange below cost for about 20% of card issuing institutions would ensures that small business card holders pay for banking services received now received at no additional cost.


Banks, Retailers to Face Off Over Fed’s Debit-Card Rule

From: WSJ


WASHINGTON—Financial firms, at a Capitol Hill hearing Thursday, will urge lawmakers to block the Federal Reserve from moving forward on a plan to limit the debit-card processing fees banks charge retailers, the latest move in their persistent battle against the nation’s merchants.

Retailers, meanwhile, are poised to vigorously defend the legislation as a much-needed intervention in a flawed pricing system.


Fed to face Congress on debit fee crackdown

By Maria Aspan

(Reuters) – The Federal Reserve may give U.S. banks insight into whether it will scale back its proposed crackdown on debit card processing fees, when a top official testifies before a congressional panel next week.

Fed Governor Sarah Raskin is expected to appear before a House of Representatives panel on February 17, according to a copy of the tentative witness list obtained by Reuters.

Banks and card companies such as Visa Inc and MasterCard Inc have been pleading with Congress and the Fed to ease up on a December proposal that would cut debit processing fee revenue by about 75 percent.


On the Call: Visa CEO Saunders on debit fee rules

NEW YORK (AP) — Pending regulations that would sharply cut the fees merchants must pay banks for processing debit card transactions have weighed on Visa Inc. shares for several months.

The rules, proposed by the Federal Reserve in December as required under last summer’s financial regulatory overhaul, are opposed by large and small banks, which maintain the government did not consider all of the costs associated with payments made using debit cards.

During a conference call to discuss Visa’s fiscal first-quarter results, Chairman and CEO Joseph Saunders said the rules as proposed amount to government price fixing that benefits no one.