ICBA expressed vehement opposition to a Federal Reserve Board proposal to impose a nearly 30% cut to debit interchange that would leave nearly one-third of covered issuers below cost recovery.
ICBA said:
- The proposal presents a one-size-fits-all solution crafted from incomplete community bank data that misrepresents the impact on both covered and exempt community banks.
- The inability to cover costs will diminish investment in debit infrastructure and hinder innovation.
- The Fed should withdraw the current proposal and proceed with a new rulemaking based on refined data collection methods for covered banks, community issuers, and new developments in the market, such as the increasing role of payment facilitators like Square and PayPal that charge flat pricing.
