Matz Urges Meaningful Exemptions for Small CUs in Interchange Rule
NCUA Chairman Debbie Matz today urged Federal Reserve Chairman Ben Bernanke to ensure that the Fed's rule limiting debit interchange fees contains "meaningful exemptions" for card issuers with assets of less than $10 billion.
Matz wrote that financial institutions of that size should be exempt from fee limits and the requirements related to network exclusivity and routing restrictions.
She wrote that these exemptions would "be consistent with the exemption from the interchange transaction fee rulemaking," aimed at shielding smaller institutions.
She wrote the letter on the eve of Thursday's hearing by a House subcommittee on the issue.
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.).
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 February 22 and the rule must be approved by April 21 and in effect by July 21.