The Dodd-Frank Wall Street Reform and Consumer Protection Act amended the Electronic Fund Transfer Act, or EFTA, to restrict interchange fees and to prohibit exclusive networks for debit card transactions. The Federal Trade Commission has the authority to enforce these EFTA amendments and the regulations that the Federal Reserve Board has issued to implement them. The FTC has provided a report to Congress on its law enforcement, outreach, and other activities to implement these new requirements, as well as on the FTC’s other efforts to protect consumers who use payment cards.
According to the report, some have expressed a concern that smaller community banks and credit unions, although exempted from caps on debit card interchange fees, will nonetheless also see a reduction in interchange revenue. According to data collected by the Federal Reserve Board and released in May 2012, interchange fees paid to exempt issuers are higher than those paid to non-exempt issuers. A recent report by the General Accountability Office also concluded that “community banks and credit unions have not, on average, experienced a significant decline in their debit interchange fees as a result of the Federal Reserve’s implementation of section 1075 of the Dodd-Frank Act.”
The Senate Appropriations Committee asked the FTC whether it has identified any evidence that payment card network companies have taken steps to diminish the ability of small banks and credit unions to successfully compete with large financial institutions in the debit card issuance market, and if any such steps have been taken by the card network companies in coordination or collusion with large financial institutions. To date, the FTC staff has not uncovered evidence that this type of conduct is occurring.