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The House Financial Services Committee recently released a 20-page report detailing its legislative and oversight priorities for the 112th Congress. Chairman Spencer Bachus (R-AL) has been quite public about reviewing many aspects of the Dodd-Frank Act. Page nine of the report is pretty specific about the majority's intention with respect to debit card interchange fees:
The Committee will examine general issues involving the setting of interchange fees. In particular, the Committee will evaluate the Federal Reserve‘s rulemaking under Section 1075 of the Dodd-Frank Act and its effect on merchants, banks, credit unions, consumers, and the payment processing networks. Section 1075 requires the Federal Reserve to establish, by July 2011, a price cap for debit card interchange fees, mandating that the fee be ―reasonable and proportional‖ to the cost incurred by the issuing bank.
As we know, the Financial Institutions and Consumer Credit Subcommittee will first address the Fed's proposed rule on February 17. We should have more details on the hearing next week.
This is a bad amendment for everyone except retailers. It may even turn out to be bad for them if bank fees leave less disposable income to spend in their stores, and if the card issuing banks decide debit cards are no longer profitable and therefore just stop issuing them. Personally I intend to make my position known on the federal reserve website before the comments close on Feb 22nd. This is an unconstitutional bill and it is nothing more than an attempt to pander to special interest groups and lobbyists for retail big box enterprises.
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