WASHINGTON — As food retailers amassed here last week for their annual Washington Public Policy Conference, the chairman of the Federal Reserve Board told Congress that the Fed would not be able to complete a rule for debit-card fee regulation in time for the April 21 deadline.
Ben Bernanke told Congress that the volume and complexity of the comments the Fed had received on its proposal to cap debit-fee interchange rates at 12 cents per transaction would force a delay in finalizing the rule, which has long been sought by retailers.
“The big banks make more money per transaction from swipe fees than what the store will make in profit,” said Leslie G. Sarasin, president and chief executive officer, Food Marketing Institute, which co-hosted the conference with the National Grocers Association and the Food Industry Association Executives.
“Every month that reform is delayed means $1.3 billion a month in banks and card company pockets,” she said. “It is imperative that these reforms go into effect this year so Main Street businesses and their customers benefit from a more fair and transparent process.”
The Federal Reserve still expects to finalize its proposed rule in time to meet the July 21 implementation date set by Congress as part of the financial reform bill passed last year, FMI said.
Two separate bills have been introduced seeking to delay the final rule, as banks have lobbied heavily against reform. Debit-fee interchange currently runs at about 44 cents per transaction.
“The food retailing industry is a penny business and the big banks have been taking nearly 50 times that,” said Peter Larkin, president and CEO, NGA. “These transactions are nothing more than electronic checks, and retail grocers believe strongly that the Federal Reserve should be permitted to determine what are reasonable swipe fees to create competition in the marketplace.”
