The Hispanic community will "suffer a significant burden," if Congress and regulators don't study the unintended consequences of the Durbin amendment to regulate debit interchange fees.
That's the message that Hispanic Chamber of Commerce President/CEO Javier Palomarez conveyed to Senate leaders.
He said the Federal Reserve's proposed rule, which was the result of an amendment to the financial overhaul bill sponsored by Senate Majority Whip Richard Durbin (D-Ill.), would decrease the availability of debit cards. This would especially hurt 80 million underserved people, including thousands of Hispanics, he wrote in a letter to Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.
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Palomarez added that "further study is needed in order to consider whether or not to impose a new regulatory regime."
Sen. Jon Tester (D-Mont.) introduced legislation on Tuesday that would delay the implementation of the Fed's rule by two years and have several regulatory agencies study the issue. A companion bill was introduced in the House by Rep. Shelly Moore Capito (R-W.Va.) and calls for a one-year delay.
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.
According to the provisions of the financial overhaul passed by Congress last year, the final rule must be approved by April 21 and in effect by July 21.
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