Citing concerns about security, a trade association representing technology companies is urging lawmakers to support a delay in the implementation of the Federal Reserve’s rule regulating the amount of interchange fees.
The amendment mandating the Fed rule will “drive networks to cut costs by routing consumer’s financial transactions through cheaper networks, regardless of the network’s security and functionality,’’ TechNet President/CEO Rey Ramsey wrote in a letter to senators.
Ramsey said as a result of changes it would be “more difficult for banks and other financial institutions to quickly and efficiently identify fraud and other financial infringements on networks operating with minimal security components.’’
Sen. Jon Tester (D-Mont.) has introduced legislation that would delay implementation of the Fed rule by two years. A companion bill introduced in the House by Rep. Shelley Moore Capito (R-W.Va.) would delay implementation by one year. Both bills call for a study of the issue by the key financial regulators, including the NCUA.
The interchange provision was added in the Senate after the House passed a version without it. During the House-Senate conference committee to reconcile the versions, senators said they wouldn’t support the bill without the interchange provision.
Last month, the Fed pushed back the date when it will release its final rule.