The Board of Governors of the Federal Reserve (the “Board”) has announced that it is extending the comment period for its proposed changes to its debit card interchange fee rule until May 12, 2024. Comments were originally due on February 12, 2024.
On October 25, 2023, the Board issued a Notice of Proposed Rulemaking for Regulation II. The proposed regulation would update all three components of the interchange fee cap. Under the proposal, the base component would decrease from 21 cents to 14.4 cents, the ad valorem component would decrease from 5.0 basis points (multiplied by the value of the transaction) to 4.0 basis points (multiplied by the value of the transaction), and the fraud-prevention adjustment would increase from 1.0 cents to 1.3 cents for debit card transactions subject to the interchange fee cap.
In conjunction with extending the comment period, the Board also published additional data concerning the proposed methodology for determining the base component of the interchange fee cap.
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