Debit interchange battle enters new arena

Published by: Sean Brown

January 10, 2024 | Government Affairs, Uncategorized

For more than a decade, credit unions have fought back against short-sighted, misguided, and detrimental changes to the current interchange system. After the passage of the original Durbin Amendment, subsequent changes to the interchange system have been chiefly thwarted; however, as the saying goes, “if you can’t legislate, regulate.” That is precisely what is happening with the Federal Reserve’s most recent proposed rule to lower the interchange caps. Specifically, the proposal would reduce the base component of the interchange fee cap to 14.4 cents (down from the current 21 cents), reduce the ad valorem component to 4.0 basis points (down from the current 5.0 basis points), increase the fraud prevention adjustment to 1.3 cents (up from the current one cent), and create a schedule to update all three components of the interchange fee cap every other year moving forward by directly linking the components to data from the Board’s biennial survey of large debit card issuers starting in 2025, without public comment.

The League is currently engaging with several credit unions and America’s Credit Unions to gather data to oppose this rule. All comments on the proposal are due no later than Feb. 12, 2024.

Contact Sean Brown for questions or assistance.

Sean Brown
Sean Brown Director, Regulatory Affairs E: sbrown@ohiocul.org
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