The new bill “to study the market and appropriate regulatory structure for electronic debit card transactions” and to postpone any regulation by the Federal Reserve Board for at least two years after the passage of the “Debit Interchange Fee Study Act of 2011” is now expected to deprive consumers. Conducted by the Federal Reserve Board, the Office of the Comptroller of the Currency, the FDIC, and the National Credit Union Administration, the delay will prevent retailers from giving discounts to consumers who use debit cards, subsequently costing merchants and the public more than $1 billion per month, says the National Retail Federation.
This comes at a time some members of the House Financial Services Committee are reportedly planning to introduce a bill calling for a one-year delay and a study, putting on hold plans merchants are making to pass the savings along to customers who use debit cards, ranging from discounted prices to benefits and increased services such as free delivery at an appliance store, but would be unable to do so if reform is delayed. The NRF filed comments with the Fed in February arguing that the 12-cent cap doesn’t go far enough. NRF told officials debit cards are merely plastic checks and should be honored at or close to face value since paper checks that draw on the same accounts are not subject to swipe fees. Banks’ own filings with the Fed claim only 4 cents as the cost of processing a debit transaction.
MasterCard, meanwhile, is pleased that members of the United States Senate have come together to introduce the “Debit Interchange Fee Study Act” and for the delay in the implementation of the Durbin Amendment. Since the passage of the Durbin Amendment and following the Federal Reserve’s proposed rules, concerns regarding the impact have been raised by organizations representing small financial institutions and credit unions, consumer groups, a variety of federal regulatory bodies and consumers themselves.