= Members Only Content
NEWS RELEASE
Dec. 16, 2010
ABA Media Contact: Peter Garuccio
(202) 663-5452
E-mail: pgarucci@aba.com
ABA STATEMENT ON DEBIT INTERCHANGE RULE PROPOSAL
by Edward L. Yingling, president and chief executive officer
“The rules proposed by the Federal Reserve today will have a dramatic impact on the cost of banking services for consumers nationwide. They essentially relieve retailers of paying their fair share for a card payments system that offers them tremendous benefits. This kind of government interference in marketplace pricing is a big concern for banks of all sizes, despite illusory attempts to exempt smaller institutions, and constitutes bad public policy.
“Behind every simple card transaction stands a complex and efficient infrastructure that has been developed and maintained exclusively by banks and payment networks. This system is easier, faster, safer, and more reliable than paying with cash or checks, and is capable of processing over 10,000 transactions each second. Retailers have paid fees to support this cost-effective system and have taken advantage of the many benefits it affords, including increased sales and fraud protection. Yet they have always wanted to find a way to benefit from the system without having to pay for it.
“The rules proposed today are the result of retailers’ efforts to get Congress to interfere in market pricing, and will result in diminished revenue that banks currently use to fight fraud, make loans, and provide low-cost basic banking services. They will also discourage further innovation in the payments system.
“The ABA will be looking closely at this more than 150 page proposal in the days and weeks to come, but at this point, the proposal seems little more than direct government interference in the card payments system on behalf of large retailers and at the expense of everyday consumers. The card payments system has been a good deal for retailers. Today’s rulemaking will unfortunately be a bad deal for consumers.”
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $165 million in assets.
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