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Senators Urge Bernanke to Use Caution in Regulating Interchange Fees

A bipartisan group of 13 senators urged Federal Reserve Chairman Ben Bernanke in a letter sent yesterday to ensure that when the Fed issues regulations on debit interchange fees they don't hurt small financial institutions and consumers.

By Claude R. Marx | Updated on December 09, 2010

Saying that “having the government fix prices in almost any venue is a bad idea,” a bipartisan group of 13 senators urged Federal Reserve Chairman Ben Bernanke in a letter sent yesterday to ensure that when the Fed issues regulations on debit interchange fees they don’t hurt small financial institutions and consumers.

The lawmakers wrote that the amendment giving the Fed this new power, which was part of the financial overhaul bill passed by Congress earlier this year, “will make small bank and credit union debit cards more expensive for merchants to accept than those issued by larger banks and would likely put them at a disadvantage compared to large issuers. Regulating interchange fees on financial institutions over $10 billion will force smaller institutions to lower their prices in order to remain competitive.”

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