As the Dodd-Frank financial reform bill marks its first anniversary, the pace of rulemakings to implement its provisions has accelerated significantly. The agencies are now translating the statute’s broad policy decisions into specific requirements that will define how major parts of the financial services industry must be reconfigured.
On June 29, the Federal Reserve Board (Fed) issued a landmark rule that establishes the maximum interchange fee that banks that issue debit cards may charge merchants per transaction. Under the proposed rule, fees paid to the banks would have been reduced by more than $12 billion annually. The final rule increased the maximum permissible fee from the proposed level, but in excess of $6 billion annually still will be transferred to merchants. The Fed also defined how payment card networks must enable a non-captive network by which merchants may route debit card transactions so that vendors can benefit from price competition.