The Federal Reserve should extend the public comment period for its notice of proposed rulemaking to significantly lower the cap on debit card interchange fees earned by banks, the American Bankers Association and nine financial sector associations said last week in a joint letter. The Fed board in October proposed revising Regulation II to lower the cap from its current rate of 21 cents and .05% of the transaction, plus a one-cent fraud adjustment, to 14.4 cents and .04% per transaction and a 1.3 cent fraud prevention adjustment, effective June 30, 2025. They also proposed instituting a new process in which the cap was revisited every two years.
The current deadline for public comments on the proposed rulemaking is Feb. 12, 2024. In their letter, the associations asked that the deadline be pushed back at least 90 days given the significant changes that the Fed will potentially pursue. The groups noted the Office of the Federal Register has indicated that for complex regulatory proposals, extended comment periods of 180 days or more are appropriate.
“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 associations said. “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.” The groups added that the rulemaking comes amid a flurry of other proposed banking regulations, so they needed more time to analyze the potential cumulative effects on consumers and the financial sector.