Comments on Federal Reserve Interchange Proposal Due Feb. 12; League Will Oppose Changes to Current Interchange System

The Federal Reserve published its interchange proposal Tuesday in the Federal Register with a comment deadline of Feb. 12. The Fed Board of Governors proposed the changes at its Oct. 25 meeting. Credit unions strongly oppose changes to the current interchange system.

“We will carefully examine the Federal Reserve Board’s proposal and submit comments. We know the fraud costs our credit unions are facing continue to mount and we must have fairness in the system,” said League President/CEO Carrie Hunt. “The League remains engaged with policymakers on this issue because we understand the debit interchange fee cap had an impact on every financial institution, not just those issuers with $10 billion or more in assets. We know, too, that the price cap imposed on debit interchange fees is a failed policy that’s had a disastrous impact on the cost and availability of basic banking services, harming low- and moderate-income Americans.”

In a sweeping move, the Fed Board proposed a steep reduction of almost one-third in the core component of the interchange fees paid to institutions covered by the regulation and a separate reduction for a component that generates interchange income based on the purchase amount. The fraud prevention cost component of debit card interchange would rise from 1 cent per transaction to 1.3 cents per transaction.

Related: League Will Comment on Federal Reserve Board's Proposed Rule for Revision of Debit Interchange Fee Cap