Fed
Interchange Rules Assailed by Incoming House Financial Services Chair
Jan. 3, 2011
Rep. Spencer Bachus (R-Ala.), the incoming chairman of the U.S. House
Financial Services Committee, is urging the Fed to take a long look at proposed
interchange rules before making them final. Bachus said in a letter to Fed
Chairman Ben Bernanke that a 9-month timeline stipulated by the Dodd-Frank Act is
not enough to develop a fair regulatory regime. He claims the short timeframe
the Fed is working under will result in "hastily written rules" which
could have negative effects on competition and consumers. "Given the broad
scope of this required rulemaking and the enormity of its potential impact on
consumers and merchants alike, we doubt that such an extremely short timeframe
will be sufficient to produce thorough and thoughtful final rules that consider
the myriad perspectives of all affected parties," Bachus wrote. Rep.
Barney Frank (D-Mass.), the committee’s outgoing chairman, has also expressed
doubt about the Fed’s proposals, calling the planned $.12 per transaction cap “too
low.”