On April 9, 2024, the Senate Judiciary Committee will hold a hearing on credit card competition. Senator Dick Durbin (D-IL) requested testimony at the hearing from the following Chief Executive Officers who have publicly opposed his Credit Card Competition Act: Ryan McInerney (Visa), Michael Miebach (Mastercard), Scott Kirby (United Airlines), and Robert Isom (American Airlines).… Continue Reading

The Fed’s final rule implementing the Durbin Amendment (Regulation II) went into effect in October 2011.  Nearly ten years later, the final rule is still provoking controversy in the form of a new lawsuit and proposed amendments to the rule and its official commentary.

The Durbin Amendment (Section 1075 of Dodd-Frank) authorized the Fed to issue regulations to ensure that the amount of any interchange fee received by a large debit card issuer (one with at least $10 billion of assets, together with its affiliates) is reasonable and proportional to the cost incurred by the issuer. Continue Reading

Our special guest is Zarik Khan, Founder of Finsolute Advisors.  In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction.  We first look at the roles of the various parties involved in a typical transaction in which a consumer uses a debit card to make a purchase from a merchant and the various fees imposed in connection with the transaction. … Continue Reading

As we previously blogged, the Board of Governors of the Federal Reserve (the “Board”) held an open meeting on October 25, 2023 to discuss the debit card interchange fee cap. The debit card interchange fee cap was part of the so-called “Durbin Amendment” to the Dodd-Frank Act, which required the Board to promulgate a regulation applicable to banks having more than $10 billion in assets establishing maximum debit card interchange fees that are “reasonable and proportional to the actual cost” of processing the transaction.… Continue Reading

The Board of Governors of the Federal Reserve (FRB) is holding an open meeting on October 25, 2023 to discuss proposed revisions to the Board’s debit interchange fee cap contained in Regulation II, which implemented the Durbin Amendment.  For large issuers (with $10 billion or more in assets), Section 235.3(a) of Regulation II requires an issuer to charge interchange fees that are “reasonable and proportional to the cost incurred by the issuer with respect to the electronic debit transaction” and Section 235.3(b) of Regulation II caps such fees at 21 cents plus 0.05% of the transaction.… Continue Reading

Last Friday, the U.S. Supreme Court agreed to decide when a right of action first accrues for an Administrative Procedure Act (APA) challenge to a final rule issued by a federal agency—when the final rule is issued or when the rule first causes injury.

In April 2021, the North Dakota Retail Association, North Dakota Petroleum Marketers Association and Corner Post, Inc.… Continue Reading

North Dakota SB 2217, which passed the Republican-controlled state Senate and is currently pending in the House, seeks to prohibit the collection of interchange on the sales tax portion of electronic transactions. The bill would require payment card networks to:  “Deduct the amount of any tax or fee imposed from the calculation of interchange fees specific to each form or type of electronic payment transaction at the time of settlement;” or “Rebate an amount of interchange fee proportionate to the amount attributable to the tax or fee.” … Continue Reading

On October 3, 2022, the Federal Reserve finalized a rule expanding Regulation II (Debit Card Interchange Fees and Routing), the implementing regulation for the Durbin Amendment.  The final RULE is substantially similar to the proposed rule issued in 2021 and requires online (card not present) debit card transactions to be enabled for processing on at least two unaffiliated payment card networks. … Continue Reading

On May 19, 2021, the House Financial Services Committee will hold a hearing, “Oversight of Prudential Regulators: Ensuring the Safety, Soundness, Diversity, and Accountability of Depository Institutions.”  The scheduled witnesses are:

  • Todd Harper, Chairman, National Credit Union Administration
  • Michael Hsu, Acting Comptroller of the Currency, Office of the Comptroller of the Currency
  • Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation
  • Randal Quarles, Vice Chairman of Supervision, Board of Governors of the Federal Reserve System

Acting Comptroller Hsu is expected to be questioned about the OCC’s Community Reinvestment Act rule, its special purpose national bank charter for nondepository companies, and its fair access rule. … Continue Reading

The National Association of Federally-Insured Credit Unions (NAFCU) is hosting its annual conference in Washington, D.C. today through September 13.  Speakers will include opinion-leaders from Congress, NCUA, additional government agencies and the media, and will include HUD Secretary Ben Carson, SBA Administrator Linda McMahon, Vice President Pence’s Chief Economist, Mark Calabria (long-time housing reform advocate and former director of financial regulation studies at the Cato Institute) and House Committee on Financial Services Chair, Jeb Hensarling. … Continue Reading