The Federal Reserve Board has extended the comment period on its interchange fee proposal.
Originally set to end on Feb. 12, the comment period is now open until May 12, the Federal Reserve said in a Tuesday (Jan. 23) press release.
“The Board extended the comment period to allow the public more time to analyze the proposal and prepare their comments,” the release said.
The Board also published additional data related to the interchange fee cap, saying it did so to give the public more information as they consider the proposal.
This data concerns the proposed methodology for determining the base component of the interchange fee cap, the Board said when introducing the data.
These moves follow the October 2023 request by the Board for comment on a proposal to lower the maximum interchange fee that large debit card issuers can receive for a debit card transaction, and to establish a process for updating the maximum amount every other year, per the release.
“By law, the Board is required to establish standards for assessing whether an interchange fee received by a large debit card issuer for processing a debit card transaction is reasonable and proportional to certain issuer costs,” the release said.
This proposal may mark the most significant overhaul of debit card interchange fees in more than a decade, PYMNTS reported in October. In addition, the fees may be cut by roughly 30%.
The Fed notice of proposed rule-making found that the costs incurred by the issuer have declined through the past several years, while interchange fee caps have remained steady.
The proposed rule-making comes at a time when “debit cards accounted for over half of all non-cash payments,” Fed Vice Chair for Supervision Michael Barr said during an October meeting of the Board.
The expected reduction in fees has been met with praise by retailers, who believe that this change will benefit both their businesses and their customers. Retailers have been critical of these “swipe fees” imposed by credit card providers and banks, arguing that they are excessively high and ultimately burden consumers.
On the other hand, interchange fees have funded the build out of infrastructure to fight fraud.