Nussle to SBC: Fed debit interchange proposal should be withdrawn

America’s Credit Unions President/CEO Jim Nussle reiterated credit unions’ strong opposition to the Federal Reserve’s debit interchange proposal in a letter to the Senate Banking Committee Monday. The letter was sent in advance of Fed Chair Jerome Powell’s appearance before the committee Tuesday.

The proposal would adjust all three components of Regulation II’s interchange fee cap and calculate it with information weighted towards the largest volume debit card issuers. America’s Credit Unions submitted detailed comments in April and called on the Fed to withdraw the proposal.

“This proposal is seriously flawed. A skewed methodology for assessing base component costs fails to give appropriate weight to the cost experience of most covered issuers, especially credit unions. Additionally, the Notice of Proposed Rulemaking (NPRM) does not consider the market impact of recent amendments which went into effect in July 2023, requiring dual routing for card-not-present transactions. The July 2023 amendments and resulting changes in merchant routing behavior will have a direct bearing on the overall monetary impact of the revised interchange fee cap for both covered and exempt issuers.”


continue reading »