CUNA, NAFCU, trades request comment deadline extension for Fed's interchange proposal

CUNA, NAFCU, and other financial services organizations requested the Federal Reserve extend the deadline for its interchange proposal by at least 90 days in a letter sent Wednesday. The Fed proposed the changes at an October meeting, and comments are currently due Feb. 12. 

CUNA, NAFCU, Leagues, and credit unions strongly oppose changes to the current interchange system and are collaborating on a response with other financial services stakeholders.

"For complex proposals such as this—which require thorough analysis of the underlying data and which would provide for future amendments to Regulation II that would not be subject to the notice and comment rulemaking process—the Office of the Federal Register has indicated that extended comment periods of 180 days or more are appropriate," the letter reads. "To thoughtfully opine on the NPRM, the Associations need this additional time to collect current and historical data from our members and analyze such data against the Board’s proposed interchange fee caps. The data presented to support the Board’s proposal is complex, dated, and incomplete, requiring the private sector to invest significant time to digest and supplement it."

The proposal would:

• Reduce the base component of the interchange fee cap to 14.4 cents (down from the current 21 cents), reduce the ad valorem component to 4.0 basis points (down from the current 5.0 basis points), and increase the fraud-prevention adjustment to 1.3 cents (up from the current one cent).
• Update all three components of the interchange fee cap (base, ad valorem, and fraud prevention) every other year, starting in 2025, by directly linking the components to data from the Board’s biennial survey of large debit card issuers, without public comment.