Today, HLF filed a letter with the Federal Reserve about regulations it is proposing about “assessing whether a debit card interchange fee received by a debit card issuer for an electronic debit transaction is reasonable and proportional to the costs incurred by the issuer with respect to the transaction.” The proposal is commonly known as “Regulation II” or “Reg II.”
Merchants and consumers are on the hook for the fees associated with card transactions. HLF has argued in the past that card users and small businesses are most affected by interchange fees—more than large retailers and chains that are able to absorb these costs more easily than family-run businesses, startups, and entrepreneurs.
But there is concern that the Fed’s approach may affect efforts to promote financial inclusion through programs like BankOn, a non-profit created initiative that helps banks establish basic accounts that offer low or no fees, do not have overdraft charges, and offer online bill pay and other basic attributes. These types of accounts eliminate barriers that otherwise prevent economically disadvantaged consumers from accessing essential financial management tools like checking accounts.
According to the latest data published by the Federal Reserve Bank of St. Louis, there are 8 million accounts open and active, with 145 million debit transactions processed monthly for those account holders.
We urge the Federal Reserve to fully examine any potential harm the Reg II proposal would create for BankOn and the millions of consumers who benefit from the access it offers.
Read HLF’s comment letter.
