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Fed interchange surveys must not impose burden CUNA
WASHINGTON (11/16/11)--The Federal Reserve should ensure that its interchange market surveys, which are still under development, collect the data needed to accurately reflect all costs associated with debit card programs and debit card transactions while limiting the reporting burden for the financial institutions, the Credit Union National Association and other finance industry trades said in a recent letter to the Fed.

The Fed earlier this year released for public comment separate sample surveys to collect information on costs, debit card usage, and interchange fees: One survey is for debit card issuers, and another is for payment card networks.

Issuers and payment card network representatives will be required to respond to these surveys. Issuers will also be required to respond to a separate survey that requests information on the use of general-use prepaid cards in federal, state, and local government-administered payment programs and the interchange and cardholder fees charged when these cards are used.

The Fed surveys are intended to compile aggregate or summary information concerning the costs incurred, and interchange transaction fees charged or received by issuers or payment card networks in connection with debit card transactions.

The Fed would then use this information to generally monitor the interchange rule's impact on markets and, more specifically, to monitor the effectiveness of the interchange fee limitation exemption for small issuers.

Revising these surveys would benefit the Fed, debit card issuers, payment card networks, and the debit card marketplace, the letter said.

CUNA, the American Bankers Association, the Consumer Bankers Association, the Financial Services Roundtable, the Independent Community Bankers of America, the National Association of Federal Credit Unions, the Midsize Bank Coalition of America, the Clearing House Association, and the Clearing House Payments Company cosigned the letter to the Fed.

In the letter, the trades recommended that the Fed ensure that the surveys are drafted "with sufficient specificity and direction to elicit complete and accurate information reporting" while also allowing for cost accounting differences across issuers.

The letter also encouraged the Fed to ensure that the reporting burden "falls on the proper party, particularly with respect to government-administered, general-use prepaid cards."

The letter also suggested that financial institutions that are exempt from the interchange rule still be allowed to respond to the interchange issuer survey.

Doing so would help the Fed "collect information that will allow it to make well-informed decisions based on a robust understanding of the debit card marketplace," the letter added.

For the full letter, use the resource link.


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