The FRB announced the release of a final rule on interchange fees to implement Section 1075 of the Dodd-Frank Act. Section 1075 amended the Electronic Funds Transfer Act to require that the amount of any interchange electronic debit transaction fee be reasonable and proportional to the cost incurred by the issuer. The rule permits debit card issuers to charge up to $0.01per transaction to offset the costs of fraud prevention measures. However, the fee is only permissible if the issuer develops and implements policies and procedures to reduce the occurrence and costs of fraudulent debit card transactions. Under the rule, to receive the adjustment, issuers must review their fraud-prevention policies and procedures at least annually and notify the payment networks each year of their eligibility to receive the adjustment. The rule is effective October 1, 2012.
Alert August 07, 2012