In 2011, the Fed issued the Durbin Amendment, which capped debit interchange fees between 21 and 22 cents per transaction. NAFCU opposed the measure, saying that even small institutions—those with less than $10 billion in assets—exempt from the provision would see interchange fee income fall over time.
The Fed report found that exempt issuers received $7.4 billion in total debit interchange revenue last year, compared to $5.3 billion in 2009. The report also found the average interchange fee for exempt issuers has returned to the 2009 level of 43 cents since the rule was implemented.
NAFCU said its members’ median interchange fee has fallen since the rule took effect.
“Credit unions continue to tell us that they are feeling the pinch of this unfortunate rule in both loss of fees and increased compliance burden,” NAFCU President and CEO Fred Becker said.
Becker said credit unions and other small issuers may see a “sizable decrease in debit interchange revenue over time, which could ultimately lead to higher costs and fewer product choices for credit union members who use debit cards.”
Under the Durbin Amendment, all issuers—including small institutions—are required to offer at least two unaffiliated card networks for every debit card.
The Fed report examined the costs of including and offering a second network, finding that 84 percent of institutions with debit card programs did not have to add a second network to comply with the rule. Respondents who did have to add a second network reported a one-time cost ranging from $0 to $3.47 per card.