The Retail Industry Leaders Association (RILA) has made a plea to the Federal Reserve Board of Governors, urging them to maintain the standard 90-day comment period for a proposed rule aimed at reducing debit card interchange fees. The request was articulated in a letter submitted by Austen Jensen, RILA's Executive Vice President of Government Affairs, on December 2, 2023. Jensen strongly encouraged the board to dismiss any requests for extensions from major banks and dominant card networks in order to keep the proposal's timeline on track.
Jensen warned that "Granting any extension in the comment period or delay in the rule-making process will embolden large issuing banks and card brands while excluding relief for retailers and consumers." He added that "The largest financial institutions have used every opportunity to exploit, ignore, and challenge this critical law until enforcement action is taken against their companies." Jensen further criticized these entities stating, "Over the past twelve years…. these entities have deliberately sought to circumvent, overturn, and inhibit congressional intent as well as regulations codified by the Federal Reserve regarding the Durbin Amendment that has directly harmed every retailer in America."
According to a press release from the Federal Reserve Board dated October 25, 2023, it had requested comments on a proposal aimed at lowering the maximum interchange fee that a large debit card issuer can collect per transaction. This is intended to better reflect the issuer’s cost. For instance, under this proposal, the fee for a $50 debit card transaction would be reduced from 24.5 cents under current rules to 17.7 cents.
In another context provided by a RILA press release, it was revealed that RILA represents over 200 retailers, product manufacturers and service suppliers. These combined entities employ more than 42 million Americans and account for $2.7 trillion in annual sales.
In his letter, Jensen pointed out that U.S. retailers are burdened with excessive fees for credit and debit card transactions due to the lack of competition in the payment ecosystem.
As per the RILA website, Jensen, as the Executive Vice President for Government Affairs, serves as the association’s primary advocate on Capitol Hill. His advocacy focuses on matters related to transparency, innovation and competition in the payment ecosystem.
