Late Wednesday afternoon, the Federal Reserve approved a 21 cent cap on debit transactions plus an additional cent to help pay for fraud protection and five more basis points (bp) to account for losses due to fraud.
The new rule, which would take effect on Oct. 1, is a change from the proposed rule which would have capped fees at 12 cents and was based on staff recommendations.
The Fed received 11,570 comments and credit unions and banks had unsuccessfully urged Congress to delay implementation until next year. The rule was supposed to take effect in July.
"We are appreciative that the Federal Reserve listened to the real concerns of credit unions and other small issuers with the proposal and attempted to take steps to address those problems within the very limiting confines of the enabling statute," said CUNA President/CEO in a statement on Wednesday. "This is certainly an improvement from what the board proposed, particularly since it includes other costs and some recognition of those due to fraud."
Credit unions were definitely heard in the fight for small issuers and consumers. Cheney added in his statement, "Clearly, credit unions had an impact in this process – and we congratulate them for doing so. We will continue to work with the Fed as it implements this rule and monitor its impact on credit union members, 92 million consumers strong."