ABA Statement on Reg II Final Rule

“We are deeply disappointed in the Federal Reserve’s decision to issue a final rule on changes to Reg II without resolving multiple flaws in the proposal identified by the more than 1,700 community financial institutions who offered their comments. Among other problems, the Fed failed to conduct a required impact analysis on competition and community financial institutions. The final rule could also trigger a reissuance of debit cards at a tremendous cost and burden for community banks, and the nine-month implementation period is unrealistic. We appreciate that Governor Bowman acknowledged community bank concerns that have gone unaddressed in this final rule.

“If ultimately implemented, this rule would amplify the damage of the flawed Durbin Amendment, which never delivered on its promise to lower retail prices for consumers. Meanwhile merchants and consumers continue to benefit from significant investments in innovation and fraud detection embedded in the U.S. payments system, as noted in the Fed's own study of debit card transactions. Unfortunately, the Fed’s actions today could put the convenience, safety, and security that Americans have come to expect when they use their debit card at risk. We will continue to review all aspects of this final rule and consult with our members on our options.”