Industry Speaks Out Against Attempt to Stall Changes to Debit Card Swipe Fees
WASHINGTON, D.C. — Retail industry groups are urging federal lawmakers to reject proposed legislation that would delay any changes to the debit card swipe fees.
On March 5, U.S. Rep. Blaine Luetkemeyer (R-Mo.) introduced the Secure Payments Act of 2024, directing the Federal Reserve Board of Governors to perform a thorough economic analysis of its proposed changes to Regulation II before finalizing the rule.
Specifically, the analysis must measure the impact on consumers, including access to affordable debit accounts, and a review of the primary beneficiary of the interchange cap, according to a release from the congressman.
[Read more: Retail Groups Applaud Federal Reserve's Move on Debit Card Swipe Fees]
In October 2023, the Federal Reserve board voted to open up proposed revisions to Regulation II's Interchange Fee Cap to a 90-day public comment period upon the proposal's publication in the Federal Register. Earlier this year, the comment period was extended to May 12.
If adopted, the base component cap would decrease to 14.4 cents, the ad valorem component would decrease to 4 basis points, and the fraud-prevention adjustment would increase to 1.3 cents per transaction. With the three components taken into account, the maximum interchange fee for a $50 debit card transaction will be 17.70 cents, down from the current value of 24.50 cents for the same transaction.
Now, more than 60 national and state organizations representing consumers and merchants are speaking out against any attempts to put the proposed changes on hold, according to the Merchants Payment Coalition.
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants.
"Every day of further delay in the Fed's consideration of its proposed rule means another day in which large card-issuing banks are deducting significantly more money out of debit transactions than is reasonable, proportional, or allowable under the law Congress passed," the groups said. "That is why financial industry trade associations are seeking to delay the Fed as long as possible from taking action to update its 2011 regulation — delay preserves what for them is an enormously lucrative status quo."
The comments came in a letter signed by 66 groups ranging from consumer advocates to retail trade associations that was sent to members of the House on March 7.
The letter comes as the House Financial Services Committee holds a subcommittee hearing on March 7 the Secure Payments Act, which was introduced by Luetkemeyer and seven cosponsors.