Last week, IBAT filed a comment letter in opposition to the Fed’s proposal to lower the maximum interchange fee for large issuers. In the comment letter, IBAT stressed that numerous studies have shown consumers did not benefit from the initial capping of interchange fees and merchants pocketed more than $100 billion. Additionally, studies have shown that price controls resulted in reduced free checking accounts, higher minimum balance requirements and reduced rewards for debit card use. Finally, we agreed with Fed Governor Michelle Bowman, who stands in opposition to the proposal, stating that it would put small issuers at a competitive disadvantage.
“The initial rule had the unintended consequences of actually increasing cost to consumers in the form of increased costs for banking products, reducing access to those banking products and services and exacerbating the competitive disadvantage for small community banks,” said IBAT President and CEO Christopher Williston. “There is no reason to think this further attempt at price controls will be any different.”
