Law and regulation

The Federal Reserve Board’s proposed new debit-interchange rates are unlikely to go into effect this summer without some significant changes, the co-chief of a large independent service organization speculates.

WASHINGTON — A year after the credit card reform law was enacted, Elizabeth Warren, the administration's official in charge with setting up the Consumer Financial Protection Bureau, said the industry has improved its practices and warned against over regulation of the card market.

The Federal Reserve Board and Office of the Comptroller of the Currency are asking a federal judge to dismiss TCF Financial Corp.'s lawsuit, which seeks to block implementation of the Durbin amendment.

JPMorgan Chase & Co. is considering limiting the size of purchases allowed on its debit cards in response to the Federal Reserve Board's proposed cap on interchange fees.

Wary ISOs and acquirers are putting hiring and other plans on hold as they await the Federal Reserve Board's final version of new debit card interchange rules, which likely will reconfigure their revenue streams.

While hope is rising in some quarters that lawmakers may direct the Federal Reserve Board to delay or avoid implementation of its proposed debit card interchange rates, a large national merchants’ association sees little chance of lawmakers derailing the proposed rules.

The United Arab Emirates is planning a series of enforceable regulations that will put more teeth into prohibitions against merchants assessing surcharges on credit card purchases.

WASHINGTON – Nearly seven months after passing a bill that included a measure to limit interchange fees on debit cards, lawmakers today were expressing buyer’s remorse.

Having successfully nudged lawmakers to reconsider interchange caps, card issuers and payments networks are weighing the ramifications of another, less-discussed part of the Durbin amendment: so-called steering rules.

Decoupled-debit card programs could see a surge of fresh interest from merchants and consumers if the Federal Reserve Board’s new debit-interchange rules go through as proposed, the purveyor of one such alternative payment scheme insists.

Revenues earned by credit unions from debit card interchange is far more than was previously thought – an estimated $2.6 billion for 2010 – according to CUNA, which is preparing testimony for tomorrow’s Congressional hearing on interchange legislation.

WASHINGTON – Federal Reserve Chairman Ben Bernanke expressed doubt this morning on the workability of exemptions for credit unions and small banks from the debit interchange price controls required under the Dodd-Frank Financial Reform Act.

Visa Inc. confirmed Wednesday that it has retained counsel and said it is weighing its next moves in fighting debit interchange regulation, but it stopped short of specifying what strategies it might use in the weeks ahead.

An estimated 440 different collection agencies and creditors were sued between Jan. 16-31, a slight increase from 426 sued in the first half of the month, according to data from U.S. District Courts.

In a warm-up for tomorrow’s Capitol Hill hearing on the Federal Reserve Board’s proposed debit-interchange rules, merchants’ representatives during a press conference today said that unless the rules are left unchanged, merchants might be forced to lay off employees.

BB&T Corp. is launching a prepaid card that costs slightly more per month than some competing products — but lacks many back-end fees that have caught the ire of advocacy groups.

The powerful senator who sponsored last year’s amendment to the Dodd-Frank Reform Act regulating debit card interchange is confident his provision will stand, even as the House begins deliberations aimed at changing the provision, or at least delaying its enactment.

Credit unions now have another reason besides good member service to ensure their ATMs are shipshape — potential $500,000 fines.

Cardtronics Inc. executives during a conference call with analysts Feb. 10 cast their company as a potential beneficiary of financial reform that, as proposed, would require issuers to attach more than one unaffiliated payment network to their debit cards.

Many South Koreans may have to pay more in income taxes this year if the government removes the relief it granted 12 years ago on credit card spending when it announces its taxation policy next month.