Frank Willing To Work with GOP on Interchange Changes
Credit unions, banks and other supporters of making changes to the interchange rule have a friend in Rep. Barney Frank (D-Mass.), the top Democrat on the House Financial Services Committee.
"If they [House republicans] want to do something on it, I'll work with them," he told Bloomberg News.
Though Frank cautioned that whatever changes the House might make "they'll have problems in the Senate."
The interchange provision was first added during the Senate debate on the financial overhaul bill when that chamber adopted an amendment by Senate Majority Whip Dick Durbin (D-Ill.).
Credit unions and banks are trying to persuade the House Financial Services Committee to hold a hearing on the issue and perhaps get Congress to repeal the provision of the financial overhaul bill giving the Federal Reserve the right to set debit interchange rates.
House Financial Services Committee Chairman Spencer Bachus (R-Ala.) has said his panel plans to exercise strong oversight of the implementation of the financial overhaul bill and try to change provisions that are hurting the economy.
The Fed's proposed rule would cap card interchange at no more than 12 cents per transaction. According to the proposed rule, the allowable costs for interchange would be limited to no more than the issuer's allowable costs divided by the number of electronic debit transactions on which the issuer received or charged an interchange transaction fee in the calendar year. Or the issuer could receive debit interchange capped at 12 cents per transaction.
Comments on the Fed's proposed rule are due Feb. 22 and the rule must be approved by April 21 and in effect by July 21.