Rep. Barr and Rep. Luetkemeyer Request GAO to Conduct a Study on the Fed’s Reg II (Debit Interchange) Proposal

Dear Mr. Dodaro,

We write to request that the Government Accountability Office (GAO) study the potential impacts of the Federal Reserve Board’s proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction.

The “Durbin Amendment” to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Federal Reserve Board to ensure that debit interchange fees are “reasonable and proportional” to debit issuer costs relating to debit transactions. The Federal Reserve Board subsequently issued Regulation II, establishing a fee cap that is a sum of (1) 21 cents (base component), (2) 5.0 basis points multiplied by the value of the transaction (ad valorem component), (3) and 1.0 cent, for issuers that meet certain fraud-prevention standards (fraud prevention adjustment). 

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