The requirement in the Federal Reserve's proposed interchange rule to mandate as many as four PIN and signature networks would be "particularly problematic" for smaller issuers, NAFCU President/CEO Fred Becker wrote in a letter to the Fed.
He wrote that it is "likely to impose considerable cost on small issuers while simultaneously creating new operational issues."
Becker noted that the central bank pointed out in the proposal that debit issuers might prefer to offer a single network but the amendment mandating that the Fed set interchange rules precludes the regulator from considering those preferences.
The Fed's proposed rule capped debit interchange at no more than 12 cents per transaction. This would be a flat fee whereas debit interchange is currently calculated as a percentage of a transaction, often around 1%. Comments on the proposed rule are due to the Fed by Feb. 22.
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