Anticipated Delay in Debit Reforms Takes Shape

As was apparent to anyone watching the House Finance Subcommittee meeting on the Durbin Amendment that took place in February, a bill to delay the implementation of the amendment was introduced in the Senate yesterday. Essentially, the Senate version lays out a 24-month timeline that includes a 12-month study period and a 12-month implementation period (with an extra six months thrown in) before the network rules would take effect, and is apparently more comprehensive than the House version.

The main sponsors of the bipartisan legislation were Senator Jon Tester, a Montana Democrat, and Representative Shelley Moore Capito, a West Virginia Republican. The Senate bill would put off implementation of the rule for two years while the House version would delay it for one year.

The Senate version of the delay bill, entitled “Debit Interchange Fee Study Act of 2011,” contains provisions to halt any previous rule-making, conducts a study that includes cost analysis, impact analysis, and contains benefit calculations with regard to interchange and network fees, network exclusivity and routing, and fraud adjustments. It also draws particular attention to the impact of any new rules on small FIs and small business. Now the negotiations really begin and April 21^st is a scant 34 days away.

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