The Federal Financial Forum

 Discussion Forum at http://www.thecre.com/tForum/

 Freehold Capital Partners

 California Building Industry Association

 Sterling Atrium Corporation

CRE Note: The following article is  from Newsday.com. We note in the last sentence the critical role that Freehold  Capital Partners has played in this imporant issue. Accordingly,  CRE will be presenting an indepth analysis of the comments they submitted to FHFA on its proposed Private Transfer Fee Guidance.

Thursday October 21, 2010 11:07 AM By Kristin Taveira

The Dodd-Frank financial reform legislation requires the Federal Reserve to set interchange fees for electronic debit card transactions.  These fees are a subset of the total costs paid by merchants for the business advantages accruing from acceptance of debit cards.

In setting the interchange rate, the legislation instructs the Federal Reserve to focus on the “the incremental cost incurred by an issuer…in the authorization…of a particular electronic debit transaction….”  As a Federal Reserve Bank of Richmond publication explained, however, “It is important to distinguish between incremental and marginal costs.”  The FRB went on to explain that incremental cost is greater than marginal cost and includes some fixed costs. 

The Federal Home Finance Authority has proposed guidance which would terminate the use of Private Transfer Fees.  Private Transfer Fees are paid each time a property is sold and are often used for community benefit programs. Private transfer fees have also been used to provide a continual source of income for developers and investors.

 The FHFA has received in excess of 2,500 comments. While the FHFA is reviewing these comments  the Center for Regulatory Effectiveness is asking the public and the regulated community to comment on the following public policy issues which emerge from CRE’s review of the public comments submitted to the FHFA: