Payments-industry representatives rushed to throw support behind legislation introduced March 15 in the U.S. Senate that would delay implementation of new Federal Reserve Board rules that would cap debit interchange beginning this summer.
Critics have complained that the Fed’s proposed 12-cent cap on debit card interchange is precipitous and requires further study.
A group of senators that includes Jon Tester, D-Mont., introduced the bill, the “Debit Interchange Fee Study Act,” that would block implementation for at least two years of the so-called Durbin amendment within the Dodd-Frank Act that Congress approved last year. The Fed is scheduled to release final rules April 22, and they would go into effect in July.
“The clear implication is that more time to study the impact of this provision is definitely warranted, especially considering that the Durbin amendment was adopted at the 11th hour, without hearings, committee action or informed debate,” Frank Keating, president and CEO of the American Bankers Association, said in a statement.
The Electronic Payments Coalition, which represents most major card-payment networks and banks, applauded the bill and believes a delay is necessary to explore “serious concerns” from diverse channels, including consumer-advocacy groups, about the potential harm the debit-interchange rules may cause to financial institutions and consumers.
“The Durbin amendment was rushed through with literally no consideration as to the impact on consumers, community banks and credit unions, or our fragile economic recovery,” Trish Wexler, a coalition spokesperson, said in a press release. “This new legislation is a much-needed ‘time out’ to make sure this rule won’t end up changing the debit card as we know it today.”
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