FINAL FEDERAL RESERVE RULE
On June 29th, 2011, the Federal Reserve issued the final rule from the Durbin amendment which:
- Establishes a government cap on debit interchange rates, setting the price at 21 cents, plus 5 basis points ad valorem for fraud losses and “up to” one cent for fraud prevention.
- The mandated changes took effect on October 1, 2011. Since then, big retail has enjoyed an $8 billion dollar government bonus while small businesses and community banks have suffered.
- Requires that, by 2013, each issuer enables two unaffiliated networks for electronic debit transactions.