U.S. federal appeals court overturns debit card interchange fee cap, Fed may rewrite Regulation II
After a Court Ruling the Durbin Debit Cap Is Poised for a Rewrite
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The U.S. Court of Appeals for the Eighth Circuit overturned the 21-cent debit card interchange fee cap set by the Fed in 2011, requiring a fresh review of Regulation II, which implements the Durbin Amendment. The Fed can still appeal to the U.S. Supreme Court. The cap does not apply to issuers with assets below $10 billion. Industry observers expect that if the ruling stands, banks with larger debit card businesses will come under pressure, while exempt institutions and related payment service providers may gain more market space.
The ruling puts the methodology for calculating the debit card interchange fee cap under review again, potentially affecting the competitive landscape between large issuers and participants below the $10 billion asset threshold.
Source:Digital Transactions News · digitaltransactions.net