House Panel to Hold Hearing On Interchange
The Federal Reserve's proposed rule regulating interchange will be the subject of a Feb. 17 hearing of the House Financial Services Committee's Subcommittee on Financial Institutions.
Credit unions and banks have been working hard to persuade the panel to hold the session because of what they contend will be serious financial damage as a result of reduced income from interchange fees.
The session is scheduled to take place at 10:00 a.m. The witness list has not been announced.
The financial overhaul bill passed last year-mostly along partisan lines-gave the Federal Reserve the power to regulate debit interchange fees.
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.
The House Financial Services Committee and its subcommittee have announced 11 hearings through the beginning of March on topics such as the future of Fannie Mae and Freddie Mac and the panel's plans for overseeing parts of the Obama administration's policies under its purview.