Sen. Dick Durbin (D-Ill.) and Rep. Peter Welch (D-Vt.) urged the Federal Reserve on Friday to review the European Commission’s proposed interchange regulations and to incorporate its analysis and recommendations into the Fed’s assessment of U.S. interchange fees.
The European Commission proposed last week to cap debit fees in the EU at 0.2 percent and credit card fees at 0.3 percent.
“Our nation is undergoing a transition from a cash and check-based currency system to a system where American dollars are primarily transacted electronically,” the lawmakers said in the letter. “While this transition has brought many benefits, it has also resulted in the delegation of control over our sovereign currency to private entities.”
Durbin and Welch said major card processing companies and networks designed the U.S. interchange system to allow them to “skim a fee out of every electronic transaction while avoiding transparency and competition.”
“Central banks and antitrust regulators throughout the world have taken proactive steps to ensure competition, transparency and fairness during this shift from paper to electronic currency, but regulators in the United States have been slow to act and have fallen behind the global curve,” the legislators said. “We believe regulators in our country must act affirmatively to rein in abusive fees and practices in the electronic payments system, and we hope that the European Commission’s announcement serves as a wake-up call to action.”