Allied Credit Union President/CEO Frank Michael will be one of seven people testifying at the Feb. 17 hearing on the Federal Reserve's proposed rule on interchange fees, the House Financial Services Committee announced today.
Michael, whose $18 million credit union is based in Stockton, Calif., is one of two representatives from a financial institution. The other is Commerce Bank President/CEO David Kemper. There are representatives of merchant groups, the Merchants Payment Coalition, the Federal Reserve and an executive of VISA who are slated to testify as well.
The hearing, which is scheduled to take place at 10:00 a.m. next Thursday, is being held by the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit. It is one of several hearings that the committee is scheduled to hold on the implementation of the financial overhaul bill that Congress passed last year.
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The interchange provision was first added during the Senate debate on the financial overhaul bill when that chamber adopted an amendment by Senate Majority Whip Dick Durbin (D-Ill.).
The Fed's proposed rule would cap card interchange at no more than 12 cents per transaction. According to the proposed rule, the allowable costs for interchange would be limited to no more than the issuer's allowable costs divided by the number of electronic debit transactions on which the issuer received or charged an interchange transaction fee in the calendar year. Or the issuer could receive debit interchange capped at 12 cents per transaction.
Comments on the Fed's proposed rule are due February 22 and the rule must be approved by April 21 and in effect by July 21.
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