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Federal Reserve Chairman Ben Bernanke promised his organization would use "all the power we can" to protect small banks and credit unions from any harmful ramifications stemming from proposed debit card interchange caps, according to the Wall Street Journal.
Speaking March 23 at the Independent Community Bankers of America conference, Bernanke referenced that institutions with less than $10 billion in assets are exempt from the new debit swipe fee limits. Small banks and credit unions have protested that the clause would not help, as marketplace competition would necessitate adopting the lower interchange rates.
In his presentation, Bernanke also pointed out that many major card networks have consented to use a two-tiered fee system that might allow small banks to maintain higher interchange rates.
"But small banks don't enjoy an exemption from the second part of the debit-fee rule, which allows merchants to choose the networks they want to route their debit transactions over," continued the Wall Street Journal.
Bernanke said approximately 50 Fed staffers having been working "really hard" full-time assessing interchange practices. Since the Fed released its debit interchange proposal in December, the organization has received more than 11,000 comments on the rule that must all be reviewed, according to Bernanke.
Click here to read Bernanke's full speech at the Independent Community Bankers of America conference.
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