Backers of congressional efforts to delay implementation of theFederal Reserve's rule regulating interchange were buoyed whenFederal Reserve Chairman Ben Bernanke said the agency wouldn't beable to release the rule by the April 21 deadline.

He cited the large number of comment letters–more than11,000–and questions raised about the impact of the proposed ruleas reasons why the Fed won't make the deadline.

But he did say that the Fed plans to issue a rule before theJuly 21 deadline, when the rule is to take effect.

He wrote leaders of the Senate Banking and House FinancialServices committees that the Fed is “reviewing these comments andthe issues they raise very carefully” and because of that it willmiss the April deadline.

“This extraordinary volume of comments reflects the importanceof debit cards as a method for consumers and others to accessdeposit accounts to make payments for purchase throughout theeconomy,” Bernanke wrote.

Sen. Jon Tester (D-Mont.) was hoping to capitalize on Bernanke'sconcerns by offering his legislation to delay implementation by two yearsas an amendment to a small business bill pending on the Senatefloor. At press time, sources estimated that there were between 53and 55 votes for the amendment, short of the 60 needed to break afilibuster that Senate Majority Whip Richard Durbin (D-Ill.) saidhe would lead. Durbin sponsored the amendment to last year'sfinancial overhaul bill that ordered the Fed to write a ruleregulating interchange fees.

However, two lobbyists pushing for the delay, who requestedanonymity, said they sensed the momentum was in their favor andthat they were cautiously optimistic that there might be aresolution of the issue within the next few weeks.

Tester's bill would delay implementation by two years and acompanion bill in the House, introduced by Rep. Shelley MooreCapito (R-W.Va.), would delay it by one year. Both bills call for astudy of the issue by several banking regulators, including theNCUA.

CUNA President/CEO Bill Cheney said in a statement thatBernanke's announcement is “further proof that Congress must takeaction now to postpone this entire matter. We remain deeplytroubled overall by the impact of the statute itself and willcontinue to urge Congress to adopt legislation to delay the overallimplementation date of July 21 and carefully study the impact ofthe debit interchange provision, particularly on credit unions andtheir members.”

NAFCU has been working toward the same goal and Brad Thaler, theassociation's vice president for legislative affairs, expressedconcern that if there is no delay, it will cause problems forcredit unions.

“Congress should delay the implementation because it is acomplex issue and would have far reaching implications,” he said.“If there is no delay it will give credit unions little time tomake the adjustments needed to comply with the rule.”

CUNA Deputy General Counsel Mary Mitchell Dunn said theuncertainty means that credit unions probably won't know until the last minute whetherthe card companies will provide a two-tiered system and what kindsof losses credit unions might face. In addition, she noted thatcredit unions won't know how long they will have before they willhave to be on more than one payment network.

Both trade associations are doing extensive grassroots lobbyingand direct contacts with lawmakers, on their own and through theElectronic Payments Coalition.

That group set up a website, www.dontmakeuspay.org, tofacilitate e-mail correspondence between executives of financialinstitutions and their members or customers.

In a letter to lawmakers, NAFCU Executive Vice President DanBerger wrote that the rule would “devastate our nation's creditunions and the 92 million members they serve.” And he asked, “Isn'tit more important that action to significantly alter our nation'selectronic payments system, one of the backbones of the 21stcentury economy, is done right rather than quickly?”

According to the proposed rule, the allowable costs forinterchange would be limited to no more than the issuer's allowablecosts divided by the number of electronic debit transactions onwhich the issuer received or charged an interchange transaction feein the calendar year. Or the issuer could receive interchangecapped at 12 cents.

According to the provisions of the financial overhaul billpassed by Congress last year, the final rule was to be approved byApril 21 and in effect by July 21.