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ICBA and other groups urged the Federal Reserve Board to reject merchant requests for further changes to Regulation II governing debit card interchange fees during this week’s board meeting.
Background: The Fed board is slated to meet at 1 p.m. (Eastern time) this Wednesday on proposed revisions to the agency’s debit interchange fee cap under Regulation II (Debit Card Interchange Fees and Routing).
Details: In a joint letter, the groups called on the Fed to:
Share more details on the potential revisions before the Fed board meets to discuss the rule.
Collect and publish comprehensive data on the costs of Reg II on regulated entities and consumers.
Meet with the groups to allow them to rebut merchants’ inaccurate and misleading assertions before taking up any Reg II changes.
Recognize community financial institutions’ rising costs and falling revenues due to Reg II rules.
Previous Update: The Fed last year issued updates to its rules specifying that issuers should enable—and allow merchants to choose from—at least two unaffiliated networks for card-not-present debit card transactions, such as online purchases. Those updates took effect July 1.
ICBA Advocacy: ICBA called on the Fed to reconsider its proposal in a 2021 comment letter and 2022 joint letter with other groups, noting the Durbin Amendment has distorted the debit card and consumer checking markets. It urged the agency to delay the effective date in a separate letter earlier this year.