Arlington, VA – Steve Pociask, President and CEO of the American Consumer Institute (ACI), a leading consumer protection and research nonprofit, today voiced strong opposition to Regulation II, a proposal aimed at further reducing swipe fees for debit card transactions, in a recent filing with the Federal Reserve. He highlights in his letter the following key points:
- Consumer Impact: Initial swipe fee controls under the Durbin Amendment have negatively affected consumers by increasing bank fees and reducing free checking account availability. The proposed Regulation II threatens to exacerbate these issues.
- Failed Promises: Despite promises that consumers would benefit from savings, studies indicate that many retailers have not passed on the savings from lower interchange fees, with some even raising prices.
- Further Harms Under Regulation II:
- The proposed reduction of the swipe fee cap could increase bank account fees, costing consumers an estimated $1.3 billion to $2 billion annually.
- Consumers could see a decrease in the availability of “free” banking options, with an increase in the minimum deposits required for fee waivers, disproportionately affecting lower-income consumers.
- Federal Reserve’s Role: The Federal Reserve is urged to reconsider implementing this new, more stringent round of price controls, which could further harm consumers.
The ACI stands firm in its request for the Federal Reserve to reject the proposed Regulation II and for Congress to repeal the Durbin Amendment. Protecting consumer interests remains the institute’s top priority, and the proposed regulation is viewed as a step backward in this mission.
Read the full letter here.
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