The Clearing House Association joined the Bank Policy Institute, the Consumer Bankers Association, the American Bankers Association and other banking and payments industry associations sent a letter to the Federal Reserve Board urging it to withdraw its 2023 proposed amendments to Regulation II governing debit card interchange fees. The Associations argue that withdrawal is appropriate because the proposal is based on outdated 2021 data and comes amid significant legal uncertainty about the current regulation due to conflicting federal court decisions. In addition, proceeding with the proposal would exacerbate harm already caused by Regulation II by increasing costs for consumers—particularly low-income and underserved groups—and by undermining banks’ ability to recover costs or earn a reasonable return.

The Associations further explain that the Board has left the proposal dormant for two years creating unnecessary market uncertainty. They argue that formally withdrawing the proposal would provide regulatory clarity and align with broader deregulatory policy goals. Finally, the letter calls on the Board to publish summary results from its 2023 debit card survey, noting that the debit card market has changed substantially since the last survey of 2021 data was published. In particular, the market has seen increased fraud losses, growth in contactless and mobile payments, and card-not-present routing changes. To read the full letter click here.