US Banks Lobby Fed on Debit Card Fee Limits
US BANKS LOBBY FED ON DEBIT CARD FEE LIMITS
The battle over debit-card transaction fees has moved from the legislative to the regulatory arena as the Federal Reserve sets the rules behind the new laws.
Banks are trying to weaken the law during the rulemaking process by trying to convince the Fed that some processing fees, like fraud prevention costs, should be broadly defined.
The National Retail Federation estimates debit card fees, which are about 1 percent to 2 percent of each transaction, total $20 billion annually.
In September, the Fed will send out a survey to card issuers and card networks to collect the information that will be used in writing the regulations. It is aiming for a formal proposal later in the fall, and a final regulation in place by the law’s mandated April deadline.
The Fed is required to establish standards to determine whether the fees being charged by card issuers are “reasonable and proportional” to what it costs them to process the transaction.
Among the top concerns for banking groups is how fraud prevention costs will be factored into fee limits and what type of impact the rules may have on smaller institutions.
Story by Dave Clark for Reuters