The Center for Regulatory Effectiveness filed comments on the Federal Reserve’s Proposed Rule instituting price controls on debit interchange. The comments explained that the NPRM failed to adequately analyze the small business impact of the proposal. For example, small business debit card holders would likely have to pay fees and/or receive reduced benefits if the rule is adopted as proposed. The Board’s tentative decision to set debit interchange below cost for about 20% of card issuing institutions would ensures that small business card holders pay for banking services received now received at no additional cost.
CRE advised the Federal Reserve to include in the final rule a provision stating that the Board is receptive to receiving data concerning changes in debit interchange transaction processing costs. The rule should further explain that the appropriate mechanism for the regulated community to use in bringing revised data to the Board’s attention, and for receiving a timely and substantive response, is the agency’s Data Quality Petition process.
CRE’s comments are attached below.