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For Senior Management, From Senior Management – July 2011 Edition

July 5, 2011

W. Michael Scott – President/CEO of FMSI

The Durbin Amendment & the Tough Questions We Need to Ask Ourselves

The Durbin Amendment to the Frank-Dodd Act of 2010 is scheduled to be enacted on October 1, 2011. This amendment to the banking regulations will reduce the debit card interchange fees from an average
of $0.44 of revenue per debit card transaction to the issuing debit card institution down to an average of $0.21 per transaction. This 55% reduction in transaction fees will be felt on the bottom line of every financial institution that issues debit cards.

Offsetting cost reductions and opportunities to increase fee revenue will be on the minds of everyone. Let us encourage you to consider taking a look at the number of new hires at your institution over the past twelve months, your trends of transaction activities (mostly a downward trend), and the number of current employment openings. Then ask the  question — Are we replacing people as they leave because we are budgeted for those positions, or are we replacing them due to activity needs?

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