Community Bankers Push Back on Debit Interchange Proposal

Feb. 28, 2011

After hearing from a national group representing merchants, community banks had their turn appealing to the Federal Reserve regarding its proposed rules to limit debit interchange, though the message unsurprisingly differed. While the National Retail Federation suggested to the Fed that it hadn’t gone nearly far enough in its efforts to roll back swipe fees on debit cards ( CNP Report Feb. 25, 2011 ), the Independent Community Bankers of America suggested that if the proposal passed as written smaller banks would be forced to eliminate free checking, put the brakes on planned expansion and even lay workers off. “The Fed’s proposed rule on debit card interchange fees will lead to higher costs and reduced services for America’s consumers,” said Camden R. Fine, ICBA president and CEO.  “Now is the time for the Fed to step back, study and reevaluate the horrendous effects that this proposed rule will have on Main Street. ICBA welcomes dialogue with the Fed so that we can put a stop to this egregious rule, which will punish consumers with higher fees and fewer payment options.”