Blog: FMI advocates lower Federal Reserve debit interchange rate – Financial Regulation News – Financial Regulation News

FMI – The Food Industry Association is supporting the stance of two North Dakota trade groups maintaining the Federal Reserve’s ruling regulating the interchange on debit transactions is too high.

The FMI also believes the ruling, implemented on Oct.1, 2011, does not meet the legal requirements and should be reduced. Additionally, the trade groups lawsuit was filed in the U.S. District Court in Bismarck, North Dakota.

“FMI was an original plaintiff in a November 2011 lawsuit against the Federal Reserve Board of Governors and argued it set the regulated rate too high and did not meet the statutory requirement that it be reasonable and proportional to the issuer costs,” FMI Vice President, Political Affairs, Hannah Walker said. “Now, almost a decade later, the issuer costs have continued to go down, but the regulated rate has stayed artificially and unjustifiably too high. FMI members pay some of the highest swipe fees in the industrialized world, and it is time for the Fed to provide the relief that was envisioned in the debit reform law.”

The food industry association is a founding member of the Merchants Payments Coalition, formed to address the lack of competition in the domestic credit card market. The coalition maintains card processing fees are one of merchants’ highest costs after labor and increase prices for goods and services paid by the average family by hundreds of dollars each year.

“Banks have – for years – exponentially profited off the artificially high and unchecked credit and debit card swipe fees merchants pay, and it’s the shopper who ultimately suffers,” Walker said. “Processing fees paid by U.S. merchants to accept card payments totaled $116.4 billion in 2019, which is up 88 percent since 2009.”

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