Federal Reserve Chairman Ben Bernanke wrote a letter to the House Financial Services Committee late yesterday, informing them that the FRB will not meet the May 21st deadline to issue final rules governing debit interchange or network exclusivity and routing. He did make it clear that the board does intend to issue their final rules no later than the July 21st deadline, however, at this point – all bets may be off.
“Bernanke said the Fed needs more time to analyze the more than 11,000 comment letters it received, but is committed to having a final rule in place by July 21 when the limit is supposed to go into effect.”
Without delay, interest groups jumped to point out that this delay indicates the problems inherent in the Durbin Amendment and that the entire process should be delayed beyond July 21st in order to allow more time for study.
“Bank industry groups were quick to renew their calls for further study of the law. “Congress should immediately delay the effective date of the Durbin amendment and initiate a study to fully examine the consequences on consumers and the marketplace,” Richard Hunt, president of the Consumer Bankers Association, said in a statement.”
And of course, there’s the other side of the story:
“But retailer and merchant groups seized on Bernanke’s comment that the Fed is committed to having a rule out by July 21 as evidence the proposal will soon be a reality. Senator Richard Durbin is the author of the fee crackdown, and has fiercely opposed legislative proposals to delay the crackdown.”
Some other news agencies are reporting that the Senate bill designed to delay implementation of the Durbin Amendment for up to two years will be presented for a vote as early as later this week. We’ll see about that.
In the meantime, the industry hangs in the balance and that is not a good outcome for anyone.
