Two new congressional bills propose delays to upcoming caps on debit interchange fees that are scheduled to take effect in July.
On March 15, a group of nine U.S. senators led by Sen. Jon Tester, D-Mont., introduced the Debit Interchange Fee Study Act. This bill would delay implementation of a proposed cap on debit interchanges fees by two years and calls for a one-year study of debit interchange fees.
A bill introduced in the U.S. House of Representatives by Shelley Moore Capito, R-W.Va., calls for a one-year delay on the proposed cap on debit interchange fees and would require additional study on the issue.
In December, the Federal Reserve proposed new rules to set standards for interchange fees that merchants pay to banks when consumers make purchases with debit cards.
The new rules could limit interchange fees from 7 cents to 12 cents per transaction. The proposed cap would reduce the maximum interchange fee that an issuer receives for a debit card purchases by more than 70 percent compared to the 2009 average, according to a press release from the Federal Reserve.
To make up for this anticipated decline in income, banks are already adding checking account fees and limiting debit card rewards.
Last week, JP Morgan Chase said it was considering limiting the size of purchases allowed on its debit cards to $50 or $100.
The proposed rules would implement provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act and would apply to issuers that have assets of $10 billion or more.
The Federal Reserve will issue final rules for interchange fees in April. The rules are scheduled to take effect on July 21, 2011.