Rep. Shelley Moore Capito (R-W.Va.) plans to introduce later today a bill that would delay the implementation of the Federal Reserve’s debit interchange rule by one year.
The bill would call for a study of the issue by the Fed, the NCUA, the FDIC, and the Comptroller of the Currency. By contrast, a similar bill introduced earlier today by Sen. Jon Tester (D-Mont.) would delay implementation by two years.
“It comes down to a fairness issue. She wants to be sure that it is handled in a way that is fair to banks, consumers and merchants,” said Capito’s spokeswoman, Jamie Corley.
Capito chairs the House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit.
Corley said there are 15 co-sponsors of their measure, and that the lead Democrat is Rep. Debbie Wasserman Schultz (D-Fla.).
The financial overhaul bill passed by Congress last year mandated that the Fed issue a rule regulating debit interchange fees. The Fed has issued a draft rule, and a final rule must be approved by April 21 and in effect by July 21.
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.
Credit unions and community banks have complained that although the bill requires that small issuers be protected, the Fed’s rule doesn’t do that.
Several key regulators, including Federal Reserve Chairman Ben Bernanke, FDIC Chairman Sheila Bair and NCUA Chairman Debbie Matz have expressed concern about the Fed’s ability to protect small issuers.