#3338: Why the Fed Extended Comment Period on Its Proposal to Lower Maximum Interchange Fee...

srm_keithash_audio.mp3
File Size:	16994 kb
File Type:	mp3

Download File

---

SRM's Managing Director Keith Ash joined us on the show to share his insights on why the Federal Reserve Board extended its comment period regarding its proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction.

Stepping back, Keith explained that in October (2023) the Fed proposed changes to the regulated interchange rates and how it is calculated and asked for feedback. Now the feedback period has been extended. He brought us up to speed on what is happening with Reg II.
 
He also shared his insights of the implications for regulated issuers vs. exempt issuers, as well as his thoughts on why the Fed did this now with so much uncertainty and pressure on credit unions and financial institutions.
 
In regards to the Fed asking for comments, Keith provided what kind of feedback are they looking for.
 
He shared his thoughts on the industry bands together and provide a lot of feedback, what kind of change that could bring about. 
 
Lastly, Keith detailed what should credit unions do:
Submit specific and thoughtful versus a form letter to the Federal Reserve Board.
If you send an email use: [email protected]. Include the docket number in the subject line of the message.  Docket No. R–1818, or RIN 7100–AG67:

• Contact Governor Bowman at the Fed, the only dissenting vote against the proposal, to voice concerns directly and share evidence of harm from the  first  Durbin Amendment  (this applies to FIs above and below the $10 billion threshold).  Share anecdotal stories about the impacts of Reg II to Governor Bowman of the likely harms from this proposal, especially if it involves higher barriers to financial services.
• Write op-ed or letter-to-the-editor against the proposal.
• Moving the Fed is an uphill climb but criticism from Members of Congress could be critical to win this fight.  Consider contacting your Member of Congress and chief of staff in D.C. urging them to put public and private pressure on the Fed, especially if they are on the Financial Services or Banking Committees. Encouraging Members of Congress to write and call the Fed, voicing their opposition to a 30% cut to the current debit price cap is key. Senators and Representatives can also raise the prospect of a Congressional Review Act resolution of disapproval that would rescind any final rule the Fed publishes.
• https://www.house.gov/representatives/find-your-representative
• https://www.senate.gov/senators/senators-contact.htm
• For further engagement, get involved through an industry trade association.

Check it out and let us know your thoughts. And be sure to watch the entire interview below for all the details.