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The Nebraska Credit Union League (League) joined the Nebraska Bankers Association (NBA) and the Nebraska Independent Community Bankers (NICB) in a letter to Kansas City Federal Reserve President\/CEO Jeff Schmid expressing opposition to the Federal Reserve System\u2019s proposal to tighten debit card caps in Regulation II.<\/p>\n
The Federal Reserve\u2019s proposal would reduce the base component of the interchange fee cap to 14.4 cents from 21 cents; reduce the ad valorem to 4.0 bp from 5.0 bp; and adjust the fraud prevention adjustment to 1.3 cents from 1 cent. It would update these components every other year. Financial institutions below $10 billion would be \u201cexempt\u201d but America\u2019s Credit Unions as well as other banking trades have indicated that the exemption has not and would not be effective for financial institutions below $10 billion in assets. America\u2019s Credit Unions have studied the impact of the debit interchange law that went into effect a decade ago and found that the exemption for financial institutions below $10 billion was ineffective and reduced debit interchange income for all financial institutions while providing little to no savings for consumers as promised when the law was passed.<\/p>\n