A group of financial services organizations are asking the Federal Reserve to extend the comment period for its interchange proposal by at least 90 days.
The Fed, which proposed the changes at its meeting in October meeting, set a Feb. 12, 2024, deadline for comments.
The Fed’s proposal would reduce the base component of the interchange fee cap to 14.4 cents, down from the current 21 cents, while reducing the ad valorem component to 4.0 basis points, down from the current 5.0 basis points. Further, it would increase the fraud-prevention adjustment to 1.3 cents — up from the current one cent.
In addition, it would update all three components of the interchange fee cap — including base, ad valorem, and fraud prevention — every other year, starting in 2025. It would do this by directly linking the components to data from the Board’s biennial survey of large debit card issuers, without public comment.
The Credit Union National Association (CUNA), National Association of Federally-Insured Credit Unions (NAFCU), and credit unions strongly oppose changes to the current interchange system. And they are collaborating with other financial services groups to extend the comment period.
“For complex proposals such as this—which require thorough analysis of the underlying data and which would provide for future amendments to Regulation II that would not be subject to the notice and comment rulemaking process—the Office of the Federal Register has indicated that extended comment periods of 180 days or more are appropriate,” the groups wrote in a letter to the Fed. “To thoughtfully opine on the NPRM, the Associations need this additional time to collect current and historical data from our members and analyze such data against the Board’s proposed interchange fee caps. The data presented to support the Board’s proposal is complex, dated, and incomplete, requiring the private sector to invest significant time to digest and supplement it.”
In addition to CUNA and NAFCU, the letter was signed by the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Electronic Payments Coalition, Independent Community Bankers Of America, Mid-Size Bank Coalition Of America, National Bankers Association, and the Clearing House.