Section 8 – Other Events
Item 8.01 On December 16, 2010, the Federal Reserve Board released proposed rules governing interchange fees that merchants pay to banks when consumers make purchases with their debit cards (the “proposal”). The proposal would implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal is open for public comment through February 22, 2011, with the Federal Reserve Board expecting implementation of the proposed interchange fee standards by July 21, 2011 should the proposal be adopted. In our Form 10-Q filed on November 4, 2010, we disclosed that, in total, on an annualized basis we derive approximately $75 million in revenue from debit interchange fees. This amount reflected the estimated revenue from signature authorized debit card transactions (“signature transactions”). Based on an update of our 2010 projected volume and the inclusion of revenue from PIN authorized debit card transactions (which under the proposal are expected to be less impacted than the signature transactions), we now estimate approximately $100 million in debit interchange revenue could be impacted by the proposal. Until the regulations are finalized by the Federal Reserve Board, it is premature to assess the impact on this combined revenue stream of the proposal, but it is possible that the effect could be significant to the revenue we derive from these activities.
