Joint Trades Comment Letter to Fed on Reg II Durbin Debit Proposal

Ms. Ann E. Misback
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551

Dear Ms. Misback:

The undersigned trade associations, which represent virtually all the Nation’s regulated financial institutions, write to request that the Board of Governors of the Federal Reserve System (“Board”) withdraw the recent Federal Reserve proposal (“Proposal”) to amend Regulation II (12 C.F.R. Part 235), unless it is revised materially in the manner recommended herein.

During this trying time, our members have proven critical to maintaining the health of an American economy under siege. Our members also have greatly stepped up their payments products to support American consumers and businesses, including by facilitating Congress’ stimulus programs during the pandemic. We did not anticipate a new mandate that would require us to undertake distracting, expensive, time-consuming efforts to change our core network infrastructure. The Proposal is particularly surprising given that the primary beneficiaries of the Board’s action would be large multinational retailers that have experienced double-digit profitability increases during the pandemic, not small businesses.

Moreover, we are concerned that the Board has taken an over-simplified approach to this rulemaking, failing properly to consider the Proposal’s foreseeable harm to small businesses and consumers. We respectfully request that the Board withdraw the Proposal until it undertakes a proper analysis on the impact of any rulemaking on routing and exclusivity. In the event that the Board determines to proceed with its rulemaking, we respectfully request that the Board revise the Proposal in the manner set forth herein.

Our members remain committed to vigorously opposing any attempt to undermine the payments system at the expense of consumers. The Proposal presents a threat to consumers, issuers, and the U.S. payments system and should not be permitted to go into effect.

Download the comment letter to read the full text.