LSCU submits comment on Federal Reserve Interchange proposal
02/21/2011 04:04 pm
The League of Southeastern Credit Unions has submitted its official comment on the Federal Reserve’s proposed Debit Interchange regulation. The regulation is required by the Durbin Amendment to the Dodd-Frank Wall Street Reform law.
In the comment letter, the League pointed out its concerns that the proposal did not adequately enforce the small issuer exemption (under $10 billion in assets) from the pricing controls. Without adequate enforcement of the exemption, credit unions and other smaller issuers could find themselves either under the cap for larger issuers, or placed at a competitive disadvantage if the two tier system does not adequately prevent non-discrimination by merchants. The letter also questions the Fed’s methodology for determining that 12 cents per transaction is an appropriate cap on interchange fees for issuers not exempt from the rule. The League urged the Federal Reserve to ask Congress for the authority to delay implementation of a final rule for two years so that the impact on credit unions can be adequately considered.
The League is simultaneously working with members of Congress and their staff to push for a delay in implementation of the final rule. During the Congressional hearing into the Fed’s proposed rule, numerous members of Congress voiced the same concern and discussions of a delay became public. The League will continue to build on that momentum and work toward a goal of stopping the rule as proposed, and revisiting not only the regulatory issues involved at the Fed, but the statutory issues created by the Durbin amendment itself.