Lawmakers request study on Fed debit card rule

Reps. Blaine Luetkemeyer (R-Mo.) and Andy Barr (R-Ky.) asked the Government Accountability Office to study the potential impact of the Federal Reserve’s proposal to lower debit card interchange fees.

Joint Letter: The House Financial Services subcommittee chairmen said the proposed changes to Regulation II could restrict the availability of low-cost banking products and harm access to banking services for low-income consumers.

Stop-and-Study Bill: Luetkemeyer has separately introduced ICBA-supported legislation directing the Fed to stop and study its proposed changes before finalizing the rule. ICBA said it strongly supports the bill because the Fed’s proposal doesn’t use full and complete data from community banks, ignores its potential impact on fraud controls, and could jeopardize access to banking services.

Fed Proposal: The Fed proposal would lower the maximum interchange fee that covered debit card issuers may receive for debit card transactions under Reg II. It would adjust the interchange fee cap for debit card issuers with at least $10 billion in assets and establish a regular process for updating the maximum amount every other year based on issuer cost data.

ICBA Advocacy: ICBA has expressed deep concerns about the impact of the proposal on community banks and previously urged the Fed to reject merchant requests for further changes to Reg II.

Myth vs. Fact: ICBA and other groups last week released a document correcting myths surrounding the proposed changes and spotlighting the harmful impact of interchange regulations.

Grassroots Campaign: Meanwhile, ICBA continues calling on community bankers to urge their members of Congress to oppose the Credit Card Competition Act (S. 1838/H.R. 3881), which would extend routing restrictions to credit card transactions.