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NEW Fed releases interchange survey
WASHINGTON (UPDATED: 12:30 p.m. ET, 5/1/12)—The Federal Reserve's interchange study, as required by the Dodd-Frank Act, was released earlier today.

Among the findings:

  • The average interchange fee received by credit unions and other debit card issuers that are exempt from the Federal Reserve's debit interchange fee cap was 43 cents per transaction in 2011;
  • The average interchange fee charged by financial institutions that are subject to the cap was far lower in that time period, totaling 24 cents per transaction; and
  • The average interchange fee in 2009 was 43 cents.
The Fed reported there were 46.7 billion debit card transactions in 2011, with a value of more than $1.8 trillion. This total was a 24% increase from 2009's transaction total of 37.6 billion, and a 27% increase from the amount of interchange income tallied in 2009, $1.4 trillion, the Fed added.

The Fed's interchange market surveys collect data on all costs associated with debit card programs and debit card transactions. The survey results are drawn from debit card issuers and payment card network representatives.

The 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 surveys are intended to help the regulator monitor the interchange rule's impact on markets and the effectiveness of the interchange fee limitation exemption for small issuers.

The debit interchange fee cap regulations, which became effective last fall, limit debit interchange fees for issuers with assets of $10 billion or more to 21 cents, and allow an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.

The Credit Union National Association is analyzing the Fed report, and more on CUNA's analysis will be featured in Wednesday's News Now.

For more on the Fed survey, use the resource link.
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