Community Bankers Association of Illinois

Fed Raises Debit Fee Cap to 26 Cents

The Federal Reserve Board today approved a final draft rule to increase the cap for debit interchange fees to 26 cents, thereby more than doubling the initial proposal of 12 cents. The increase was based on estimated issuer costs required to complete a transaction plus an additional allowance of 5 cents for fraud losses. Banks will also receive extra time to comply with the rule, which was due to go into effect July 21. Now banks will have to comply with the new limits on October 1. Since the Senate failed to adopt a proposal to delay implementation of the fee cap earlier this month, CBAI and ICBA have urged the Federal Reserve to raise the cap, and the Fedís decision is most welcomed.
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