The Federal Reserve announced it will extend the comment
period for its proposed rule on interchange fees amid pushback from financial
services advocates. The proposal would lower the maximum interchange fee
receivable by large debit card issuers per transaction and establish a system
for annual fee adjustments going forward.
Specifically, the proposal would update the three components
of the interchange fee cap under Regulation II, based on the latest data
reported by large debit card issuers and implement a set of technical revisions
to the regulation. The cap would then be updated every other year by directly
linking the interchange fee cap to data from the Fed’s biennial Debit Card
Issuer Survey.
The Fed decided to extend the comment deadline by 90 days,
from Feb. 12 to May 12, to allow interested parties more time to offer feedback
about the proposed rule.
“We welcome the additional time to analyze data provided by
the Fed and gather current and historical data to support our very serious
issues with this proposal,” America’s Credit Unions President and CEO Jim
Nussle said in a statement responding to the deadline extension. “We remain
strongly opposed to any regulatory or legislative efforts to exert additional
government controls into the current interchange system, and the data will back
up our concerns.”
In a joint letter to the Fed, 10 industry trade associations
urged the Fed to extend the comment deadline to evaluate the implications of
the Fed’s notice of proposed rulemaking (NPRM) following its issuance in
November. The trades noted that the Federal Register suggests certain
complex NPRMs should come with 180-day comment periods.
“To thoughtfully opine on the NPRM, the associations need this
additional time to collect current and historical data from our members and analyze
such data against the board’s proposed interchange fee caps,” the associations
wrote. “The data presented to support the board’s proposal is complex, dated, and
incomplete, requiring the private sector to invest significant time to digest and
supplement it. Moreover, the NPRM coincides with a number of other major rulemaking
proceedings that impact our members.”
The trades further asserted the need for more time to assess
the “interplay between these rulemakings and the holistic impact” on their members,
consumers and financial markets. Additionally, they noted the timing of the NPRM,
which coincided with the start of the holiday season, cut into the amount of
time financial professionals had to review the proposal.
The trades also noted the Fed has yet to release the
underlying disaggregated data and empirical analysis used in determining the
proposed maximum interchange fee cap and future cap adjustments.
“Without this information, it is difficult to replicate the
analysis in any meaningful way, significantly hindering the public’s ability to
comment on the methodology proposed,” the trades wrote. “The associations
understand that releasing the data on which the board has relied may raise
confidentiality concerns; accordingly, we request only that the board release
the disaggregated data in a manner that is anonymized to the extent necessary
to protect confidential bank and credit union information. Such disclosure is
consistent with bedrock principles of administrative law.”
The letter was endorsed by the American Bankers Association,
Bank Policy Institute, Consumer Bankers Association, Credit Union National
Association, Electronic Payments Coalition, Independent Community Bankers of
America, Mid-Size Bank Coalition of America, National Association of
Federally-Insured Credit Unions, National Bankers Association and The Clearing
House.