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Interchange

The payment card interchange system in our country was working well, providing tremendous benefit to American consumers and merchants of all sizes and types until the Durbin Amendment to the Dodd-Frank Act imposed price controls on debit card interchange. For the first time in the industry’s history, the government is effectively setting the price in a business-to-business transaction.

Position

  • ICBA strongly opposes efforts to have the government set or limit payment card interchange or other fees, mandate interchange fee disclosures to consumers, or create antitrust exemptions allowing merchants to “negotiate” or “operate” in anti-competitive and collusive ways to the detriment of community banks and their customers. Government intervention should not provide one payment card type advantages over other payment card types.
  • ICBA supports payment card network rule modifications that would re-balance authorization, clearing and settlement, and guarantee provisions; and compensate issuers based on the authorization method selected by cardholders.

Background

The verdict is still out as to whether the small debit card issuer exemption from the interchange fee cap is indeed shielding community banks from the negative impact of government price fixing. ICBA is working to ascertain the impact of new and evolving marketplace dynamics (network pricing, network routing rules and issuer, network and merchant implementation) on this exemption.

Despite a settlement between merchants, payment networks and large banks in their class-action case, merchants continue to want to pay less for the benefits received by accepting payment cards. Merchants are vigorously pursuing various legislative strategies to further shift their payment card interchange costs to consumers, and are likely to continue to push Congress to regulate credit card interchange fees and further weaken payment network rules in the future. If merchant efforts are successful, community banks and their customers will pay more to provide merchants, especially larger ones, with those benefits. Retailers like Wal-Mart should not be given an even greater ability to squeeze local small businesses on margin, nor should community bank customers be forced to subsidize that anti-competitive behavior.

ICBA remains actively engaged in the regulatory and legislative process and continues to work to prevent large retailers from further damaging the electronic payments system.

Staff Contact: Viveca Ware



Date Title Source/Publication
10/02/2014 Survey: Consumers Seeing No Savings from Durbin Amendment NewsWatch Today
10/01/2014 On the Third Anniversary of the Durbin Amendment, 94% of Consumers Not Seeing the Savings Retailers Promised Them Electronic Payments Coalition News Release
09/19/2014 Fed: Debit Interchange Costs Vary Widely in 2013 NewsWatch Today
08/19/2014 Merchants Seek Supreme Court Review of Interchange Ruling NewsWatch Today
08/08/2014 Study: Durbin Transfers $1-3B From Low-Income Households to Large Retailers NewsWatch Today
08/07/2014 GMU Study Concludes Durbin Amendment Costing Banks, Boosting Profits at Biggest Retailers NewsWatch Today
03/04/2014 Payment Card Interchange Policy Resolution
08/21/2013 ICBA Statement on Fed Decision to Appeal Court Ruling on Debit Interchange News Release
05/01/2012 ICBA: Despite Study, Debit Card Interchange Rule Still Harms Community Banks and Consumers News Release
12/19/2011 WSJ Article on Debit-Fee Cap Consequences Letter to Congress
10/12/2011 ICBA Supports Legislation to Repeal the Harmful Durbin Regulation News Release
09/30/2011 ICBA: Damaging Effects of Debit Card Price Controls on Consumers Should Be No Surprise to Policymakers News Release
09/30/2011 Debit Card Interchange Fees & Routing Letter to Regulators
07/05/2011 ICBA Summary of Fed Final Rule Summary
06/29/2011 ICBA: Fed Rule on Debit Interchange Harms Consumers and Main Street Banks That Serve Them News Release
06/21/2011 Debit Card Interchange Fees Letter to Regulators
06/09/2011 Thank You for Supporting the Tester-Corker Debit Interchange Amendment Letter to Congress
06/08/2011 Support for Tester/Corker Amendment to the Economic Development Revitalization Act of 2011 (S. 782) Letter to Congress
06/07/2011 ICBA: Tester/Corker Amendment Protects Small Debit Card Issuers and Their Customers News Release
05/31/2011 Michaels Breach is Warning on the Durbin Amendment Op Ed
05/10/2011 Impact of the Debit Interchange Amendment on Small Financial Institutions Letter to Congress
04/11/2011 Proposed Rule on Debit Card Interchange Fees Joint Letter to Regulators
04/06/2011 Community Banker Says Bank Examination and Debit Interchange are Key Concerns News Release
04/06/2011 The State of Community Banking: Challenges and Opportunities Testimony
03/17/2011 Consumers Payment System Protection Act (H.R. 1081) Letter to Congress
03/16/2011 Support for the Debit Interchange Fee Study Act (S. 575) Letter to Congress
03/15/2011 ICBA Applauds Reps. Capito and Wasserman Schultz for Introducing Pro-Main Street Interchange Legislation News Release
02/22/2011 Proposed Rule on Debit Card Interchange Fees Industry Letter to Regulators
02/22/2011 ICBA Calls on Fed to Withdraw Harmful Proposed Debit Card Rule News Release
02/22/2011 Debit Card Interchange Fees and Routing Letter to Regulators
02/22/2011 Every Major National Bank and Credit Union Trade Association Joins to Urge Fundamental Revision of Federal Reserve’s Debit Card Rule Industry News Release
02/17/2011 ICBA to Congress: Fed Rule on Interchange Fees Will Cost Consumers News Release
02/17/2011 Understanding the Federal Reserve’s Proposed Rule on Interchange Fees: Implications and Consequences of the Durbin Amendment Written Statement
02/14/2011 Survey: Fed Debit Card Rule Will Harm Community Bank Customers News Release
02/07/2011 Commentary: The Problem with Interchange Price-Fixing Op Ed
02/01/2011 Speak Up on 80 Percent Reduction in Debit Interchange CEO Alert
01/10/2011 ICBA: Two-Tier Debit Card Interchange Plan Won’t Work for Community Bank Customers News Release
12/16/2010 ICBA: Proposed Interchange Rules Will Disadvantage Community Bank Customers News Release
06/30/2010 Interchange "Swipe" Fees Letter to the Editor
06/22/2010 ICBA to Conferees: “Compromise” on Interchange Price Controls Is No Compromise News Release
06/09/2010 ICBA’s Fine Speaks Out on Harmful Senate Interchange Amendment News Release
05/12/2010 ICBA to Senate on Interchange: “Carving Out” Community Banks Will Not Help Main Street News Release
05/05/2010 Industry Letter on Amendments to S. 3217 Affecting Interchange Rates Letter to Congress
04/28/2010 ICBA Urges Congress: Oppose Misguided Interchange Legislation That Would Hurt Main Street Banks and Their Customers News Release

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