Community Bankers Association of Illinois

ACTION ALERT - Delay Implementation of Debit Interchange Regulations
March 16, 2011

We are pleased to report that bi-partisan CBAI-supported legislation has been introduced in the U.S. Senate (S. 575) and House (H.R. 1081) to delay the implementation of debit interchange regulations. Your action is needed to express your support for these bills with Illinois Senators Richard Durbin and Mark Kirk, and your member of the House of Representatives.

Community bankers from across Illinois, and your Community Bankers Association of Illinois, have consistently opposed government regulation of debit interchange fees. Our objections are based in part because we believe the federal government has absolutely no business regulating the fees on these private transactions. Also, in determining costs, the Fed is only permitted to consider the "reasonable and proportional" costs incurred by the issuer to authorize, clear and settle the debit transactions. Community bankers know that these are only part of the "true and actual" costs a bank incurs in offering and operating a debit card program. We estimate that if the proposed rule is implemented the maximum allowable interchange fee received for POS debit card transactions will be 70%-80% lower than the 2009 average. This reduction in income will render community banks' debit card programs unprofitable and unsustainable.

All of the banking regulators, including Federal Reserve Board Chairman Ben Bernanke, FDIC Chairman Sheila Bair, OCC Comptroller John Walsh, as well as the Conference of State Bank Supervisors have voiced their concerns about the negative impact of this legislation. CBAI, together with the ICBA, have been working with a bi-partisan group of congressmen to introduce the legislation to delay the implementation of debit interchange regulation and call for a thorough study examining the significant consequences debit interchange price fixing will have on community banks and the American consumer. The time has come to ensure that the voices of Illinois community banks are heard!

Please respond to the Action Alert today by CLICKING HERE!
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