Swipe fees: reform delayed, caps reduced
The National Lumber and Building Material Dealers Association (NLBMDA) said it was disappointed by the Federal Reserve Board's decision to delay and reduce fee caps for certain card transactions.
On Wednesday, the board voted to approve a final rule that would institute a 21-cent cap on interchange, or "swipe," fees, rather than the 12-cent cap initially proposed in December. Moreover, the Board delayed the effective date of the new regulations from July to October 1 in the face of intense lobbying campaigns by big banks, the NLBMDA said. The fees currently average 44-cents per transaction. Small financial institutions with assets under $10 billion will be exempt from the new caps.
"While the final cap does not provide the level of relief building material dealers were expecting, instituting a cap and increasing oversight of out-of-control swipe fees will still cushion the burden retailers bear in these challenging economic times for the housing industry," said Scott Lynch, NLBMDA executive VP.
Last year, Senator Richard Durbin (D-IL) attached provisions to the financial industry reform legislation to direct the Federal Reserve to issue rules for "reasonable and proportional" fees for debit card transactions. NLBMDA joined other retailer groups in support of the Durbin amendment and filed comments in support of the Board's proposed rule in December. Grassroots lobbying by NLBMDA members helped defeat a recent Senate measure that would have delayed swipe fee relief by more than a year.