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Legislation Limiting Debit Card Fees Paid by Merchants

May 26, 2010

Regulations targeting reform in the financial sector is now targeting debit card fees paid by merchants.  The Senate recently adopted a seven-page amendment with major implications for debit card issuers, merchants and consumers.  The legislation aims to limit fees paid by merchants to debit card issuers.   In summary, the legislation would require the Federal Reserve to set “reasonable and proportional” debit interchange fees for institutions with $10 billion or more in assets. 

Only time will tell if this will pass.  One thing is for sure that financial institutions and their related associations are not letting this pass without a fight to prevent it.  “We’re not going to hold anything back,” said Ryan Donovan, vice president at the Credit Union National Association (CUNA).  In addition Dan Berger, executive vice president at the National Association of Federal Credit Unions (NAFCU) states, “We believe Frank is very pragmatic on business-to-business contractual issues and recognizes that the last-minute interchange amendment is an attempt by the big-box stores and giant retailers to make even more money off the backs of consumers and small financial institutions on Main Street.  Since this provision is not in the House bill, we feel there is an opportunity for substantial changes in conference.”

Excerpts taken from thehill.com article “Banks, credit unions face tough fight on swipe fees” by Silla Bush 5/25/10

3 Comments leave one →
  1. June 23, 2010 12:04 pm

    “The US House of Representatives looks set to accept plans by Senator Richard Durbin to curb debit card interchange fees but only after a tweak in his amendment which protects Visa and MasterCard. ”

    http://www.finextra.com/news/fullstory.aspx?newsitemid=21524

  2. June 25, 2010 3:30 pm

    I am not surprised that his happened. I have seen so many differences in the fees set by the different merchant services providers and banks on these fees. There was no standard and many times, retailers were confused about what they were paying.

    • June 25, 2010 3:44 pm

      It will be nice in many ways to have an industry standard.

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