NAFCU has urged the Federal Reserve to take guidance from the failed amendment that would have delayed the Durbin debit interchange cap and moderate the upcoming rule.

In a letter Thursday to Federal Reserve Chairman Ben Bernanke, NAFCU argued that the Fed has sufficient authority to soften the cap’s impact.

“First, the Board does have the authority to consider costs beyond authorization, clearance and settlement,” NAFCU wrote in a letter signed by CEO/President Fred Becker. “In fact, the proposed rule indicates that the Board considered including several other allowable costs that, in its view, would be permitted under §920(a) of the Electronic Funds Transfer Act (EFTA).

“The amendment the Senate voted on yesterday is evidence that there is indeed concern with the limited number of costs the Board considered and the correspondingly insufficient interchange fee the Board approved in the proposed rule.” 

NAFCU also argued that the Fed has the authority to determine if the small issuer exemption to the cap will even work in practice. 

“The Board has obviously been studying this issue for quite some time,” Becker observed in the letter. “Nonetheless, the events of the last week illustrate the deep-rooted and wide-ranging concerns regarding this complicated matter. I would again urge the Board to use its authority to set the interchange fee cap at a level that better reflects the actual costs of operating a debit card program. I also hope the Board considers examining and reporting on the small issuer exemption and issues with its implementation.”