Fed extends comment period on debit card interchange fee proposal

The Federal Reserve today announced that it has extended the public comment deadline to May 12 for its proposal to lower the cap on debit card interchange fees. The Fed also published additional data related to the fee cap to give the public more information to consider when filing comments.

The Fed is proposing to revise Regulation II to lower the cap from its current rate of 21 cents and .05% of the transaction, plus a one-cent fraud prevention adjustment, to 14.4 cents and .04% per transaction and a 1.3 cents fraud prevention adjustment, effective June 30, 2025. It would also institute a new process in which the cap is revised every two years. The comment deadline originally was Feb. 12. The new deadline of May 12 extends the comment period by roughly three months.

The American Bankers Association joined with other financial industry groups in November to request that the Fed extend the comment period for the proposed rulemaking by at least 90 days. The association is concerned that the proposal is likely to harm banks of all sizes as it is based on flawed data and formula.