Posted on 06/08/2011 at 10:41 AM by The Newsroom
In a closely watched vote, legislation in the Senate that would have delayed the Federal Reserves implementation of the interchange (card swipe) fee caps of 12 cents per transaction beginning July 21 failed to muster the required 60 vote to force a delay. The final vote was 54-45 in favor of the legislation, just six votes shy of the number needed. Current estimates show that the average swipe fee is 44 cents per transaction, and estimates of the cost to banks of the new caps are between $10 and $15 billion. Banks large and small worked hard to see the interchange fee provisions of Dodd-Frank changed. Although banks with less than $10 billion in assets are exempt from the caps, from a competitive standpoint, most small banks believe they will have to reduce fees to be in a position to compete with bigger banks for customers. The Fed indicated it is set to introduce the new rules in a matter of days and has given no indication yet that it is inclined to set the fee cap higher than the earlier-proposed 12 cents per transaction.