The Federal Reserve should mandate a monitoring process to ensure “all allowable and reasonable costs,’’  are included when setting the cap on interchange fees, CUNA President/CEO Bill Cheney wrote in a letter Wednesday to Fed Chairman Ben Bernanke.

Cheney also suggested that the Fed “revise the proposal regarding the routing and exclusivity provisions that if unchanged, will also undermine the exemption for small issuers. We urge the board to consider whether small issuers can be exempt from these provisions or, if that is not feasible, then we urge the board to delay these provisions, which do not have a statutory effective date, for at least 24 months.’’

Cheney sent the letter to Bernanke a few hours after the Senate rejected an amendment that would have delayed the implementation of the Fed’s rule regulating debit interchange fees by as much as a year.

The Fed’s rule is supposed to take effect on July 21. It issued a draft rule in December and was supposed to issue a final rule in May, but that has been delayed.

Acording 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.