Swipe fees are the hottest news among those in the know since the rise and fall of the Kardashian Kard. People are talking about the Debit Card Interchange Fees and Routing rule proposed by the Federal Reserve, to be completed later this month.
The rule springs from a section of the Dodd-Frank Act that added a provision to the Electronic Fund Transfer Act that addresses interchange fees—the fees that banks charge businesses every time customers swipe debit cards at points of sale.
Under the rule, banks would be limited in how much they could charge businesses per debit-card transaction. Currently, the average debit-swipe fee is reported at 44 cents. The rule could cap that fee to 7-12 cents per transaction.
The Fed received thousands of public comments on the proposed rule.
Bill Cheney, president and CEO of the Credit Union National Association, expressed CUNA’s concerns about the interchange fee caps.
“Credit unions do not want to charge their members more fees,” Cheney wrote. “However, the result of the loss of interchange-fee income for small issuers and the costs of having to belong to more payment networks will have a horrendous impact on credit unions that offer debit cards and their ability to build net worth.”
Another commenter, a man who identified himself as a “small business merchant,” wrote, “Please—we small merchants need relief from the never-ending, escalating, debit/credit card fees being imposed on us.”
Lawmakers opposed to the rule introduced legislation in the House and Senate in March. Rep. Shelley Capito, R-W.Va., introduced a bill that would delay the rule. Sen. Jon Tester, D-Mont., introduced a bill “to study the market and appropriate regulatory structure for electronic debit card transactions, and for other purposes.” Both bills were referred to committees. The proposed rule was published in the Dec. 28, 2010 Federal Register. The deadline for public comments was Feb. 22, and the deadline for the Federal Reserve to complete the rule is April 21.
The final rule is scheduled to take effect July 21.
For more information, visit the Federal Register or regulations.gov.
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