Cheney Urges Fed to Delay Parts of Interchange Rule
While CUNA and other groups are urging Congress to delay the implementation of the Fed’s interchange rule, the trade group is now also asking the Fed for a two-year delay on the provisions for exclusivity arrangements and routing restrictions.
CUNA President/CEO Bill Cheney on Monday wrote Federal Reserve Chairman Ben Bernanke and noted that while Congress required the Fed to prescribe rules regarding these provisions, there is no specific deadline for them to take effect.
By contrast, Cheney noted, the law requires the provisions regarding rate standards to take effect by July 21.
“Delaying the effective date of these provisions would not undermine merchants’ ability to pay lower fees to large issuers. Such a delay would, however, allow time for the exemption to work for small issuers, as Congress intended, without any group of issuers or the federal government being harmed as a result of compliance with the routing and exclusivity provisions,’’ Cheney wrote.
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.