Engaging the Fed on Reg II

Together with several other federal financial trade associations, America’s Credit Unions met with Federal Reserve Board Governor Stephen Miran Tuesday to discuss the Fed’s proposed rule to reduce the debit interchange fee cap.  
 
America’s Credit Unions has led the charge to advocate against the proposed rule, continuously pointing to how critical financial services programs such as fraud prevention measures and free to low-cost checking accounts will be harder for financial institutions to support.  

At the meeting, the group reiterated to Miran that the Fed is not required to amend the rule. They pointed out that based on public comments from the Federal Reserve Board, there is good reason to rescind the 2023 proposed rule.  

Another reason for America’s Credit Unions’ longstanding concerns with the proposal stems from the rule being predicated on “flawed methodology” that disregards the cost experience of most issuers, especially smaller credit unions. 

Earlier this year, credit unions called for the Fed to withdraw the proposed interchange rule, pointing to a recent court decision that complicates how it could be administered. A district court invalidated the Fed’s Regulation II interchange fee standard in August, finding it unlawfully allowed recovery of costs beyond the incremental authorization, clearance, and settlement costs specified in the Durbin Amendment.