NRF Welcomes Bernanke Promise to Complete Swipe Fee Reform Regulations by Summer

March 29, 2011 06:36 PM Eastern Daylight Time 

WASHINGTON--(BUSINESS WIRE)--The National Retail Federation welcomed today’s commitment by Federal Reserve Chairman Ben Bernanke that the agency will complete final swipe fee reform regulations in time for retailers to begin offering customers discounts and other benefits this summer as scheduled.

“The banking industry and some in Congress want to delay swipe fee reform for as long as two years, but Chairman Bernanke has made it clear that the Fed doesn’t need a delay in implementation”

“Retailers want to begin passing on swipe fee savings to their customers as soon as possible, and today’s announcement means those plans will be able to move forward as planned despite the anti-consumer efforts of some in Congress,” NRF Senior Vice President and General Counsel Mallory Duncan said. “The Fed has received thousands of comments on this proposal and it is appropriate for that input to be carefully and thoroughly reviewed. If they take a few extra weeks, we understand.”

“The banking industry and some in Congress want to delay swipe fee reform for as long as two years, but Chairman Bernanke has made it clear that the Fed doesn’t need a delay in implementation,” Duncan said. “Congress held seven hearings and ordered two GAO studies of swipe fees before enacting this law last year. Congress has made its decision and should allow the Fed to complete its work. Delay beyond this summer’s deadline would amount to a $1 billion-a-month bailout for big banks.”

Bernanke said today that the high volume of comments received by the Fed and the issues they have raised mean the agency will slip beyond an April 21 deadline to complete final regulations. But he acknowledged that swipe fee reform legislation enacted last year will take effect on July 21 even without regulations and said “we are committed to completing the rulemaking for that provision in advance of that date.”

Regulations proposed by the Fed in December would lower debit card swipe fees from their current level of 1 to 2 percent of each transaction to a flat fee of no more than 12 cents per transaction for large banks that adhere to fees set by the card companies. Banks that set their own rates would be free to charge any fee they believe the market would bear provide that they do so independently. The move would reduce the current $20 billion a year in debit swipe fees by about 70 percent, or $1.2 billion a month. Financial institutions with less than $10 billion in assets are exempt.

Merchants are making a wide variety of plans to pass the savings along to customers who use debit cards, ranging from discounted prices to benefits and increased services such as free delivery at an appliance store, but would be unable to do so if reform is delayed. Some of the moves, such as hiring more sales associates to help customers, could result in significant job creation.

Legislation introduced earlier this month by House Financial Institutions and Consumer Credit Subcommittee Chairwoman Shelley Moore Capito, D-W.Va., would delay implementation of swipe fee reform by a year and require a study of the issue. A similar bill introduced by Senator Jon Tester, D-Mont., calls for a two-year delay.

As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.4 trillion. www.nrf.com

www.nrf.com/swipefees

Contacts

National Retail Federation
J. Craig Shearman, 202-626-8134
shearmanc@nrf.com

Related articles

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• Bill Cheney: Debit Interchange: Those Who Can Least Afford It Will Be Hurt Most (huffingtonpost.com)
• New debit card 'swipe' fee rules threatened (dailykos.com)
• Senators Back Delay In Crackdown On Fees That Yield Billions For Banks (huffingtonpost.com)
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• Retailers Say Federal Reserve Proposal to Lower Debit Card Swipe Fees Doesn't Go Far Enough (stiel.org)
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Durbin, Debit and Financial Reform

PYMNTS.comWHAT'S NEXT IN PAYMENTS  Friday 06.11.10

FEATURED STORY Durbin, Debit, and Financial ReformThe Durbin Amendment is emblematic of the abject failure of Congress and the President to do the right thing. It would require the Federal Reserve Board to regulate the setting of debit card interchange fees so that they are "reasonable and proportional to processing costs". Read More

NBC Bank Selects Wolters Kluwer Financial Services to Comply with Reg E Changes

MINNEAPOLIS--(BUSINESS WIRE)--Wolters Kluwer Financial Services announced today NBC Bank of Oklahoma City, Okla. has selected it to help the bank manage compliance with the Federal Reserve Board’s upcoming changes to Regulation E (Reg E). The changes, which take effect July 1 for new accounts and Aug. 15 for existing ones, require financial institutions to gain approval from consumers before charging overdraft fees on one-time debit card or ATM transactions.

“Community banks like NBC don’t have the resources to meet the Reg E requirements in a timely manner”

NBC Bank has completely outsourced the overdraft fee approval process to Wolters Kluwer Financial Services through the company’s Reg E Opt-in Manager solution. The technology system uses the bank’s account-holder information to create cover letters, opt-in notices, and confirmation of consent notifications. Messages are securely and electronically delivered, or mailed if necessary, to NBC Bank’s customers who can opt-in or out.

Reg E Opt-in Manager also provides a full audit trail of opt-ins and opt-outs that are captured, scanned, imaged, and sent electronically to NBC Bank to track compliance with Reg E. And the bank receives regular reports of all opt-ins and outs. In addition, Wolters Kluwer Financial Services’ warranted compliance documentation helps relieve NBC Bank of any unnecessary risk.

“Community banks like NBC don’t have the resources to meet the Reg E requirements in a timely manner,” said Shelley Gaidaroff, senior vice president and chief operating officer for the bank. “We’re not staffed to continually monitor and track our entire customer base for opt-ins and opt-outs. But by working with Wolters Kluwer Financial Services, we’re confident the process will be quicker, more efficient and allow us to streamline the process internally. We’ll also comply with the regulation while protecting our fee income.”

Gaidaroff added that NBC Bank has trusted Wolters Kluwer Financial Services and a number of its Bankers Systems brand of compliance solutions for nearly a quarter of a century, which made turning to the company for help in complying with the Reg E changes an easy decision.

For more information about Reg E and Wolters Kluwer Financial Services’ Reg E Opt-in Manager solution, visit the company’s Reg E Resource Center at www.WoltersKluwerFS.com/RegE.

About Wolters Kluwer Financial Services

Wolters Kluwer Financial Services provides best-in-class compliance, content, and technology solutions and services that help financial organizations manage risk and improve efficiency and effectiveness across their enterprise. The organization’s prominent brands include Bankers Systems, VMP® Mortgage Solutions, PCi, AppOne®, GainsKeeper®, Capital Changes, NILS, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services is part of Wolters Kluwer, a market-leading global information services company focused on professionals with annual revenues (2009) of €3.4 billion ($4.8 billion), approximately 19,300 employees worldwide and operations in over 40 countries across Europe, North America, Asia Pacific, and Latin America. Visitour website, YouTube or follow @Wolters_Kluwer on Twitter for more information about our market positions, customers, brands, and organization.

NBC Bank Selects Wolters Kluwer Financial Services to Comply with Reg E Changes

MINNEAPOLIS--(BUSINESS WIRE)--Wolters Kluwer Financial Services announced today NBC Bank of Oklahoma City, Okla. has selected it to help the bank manage compliance with the Federal Reserve Board’s upcoming changes to Regulation E (Reg E). The changes, which take effect July 1 for new accounts and Aug. 15 for existing ones, require financial institutions to gain approval from consumers before charging overdraft fees on one-time debit card or ATM transactions.

“Community banks like NBC don’t have the resources to meet the Reg E requirements in a timely manner”

NBC Bank has completely outsourced the overdraft fee approval process to Wolters Kluwer Financial Services through the company’s Reg E Opt-in Manager solution. The technology system uses the bank’s account-holder information to create cover letters, opt-in notices, and confirmation of consent notifications. Messages are securely and electronically delivered, or mailed if necessary, to NBC Bank’s customers who can opt-in or out.

Reg E Opt-in Manager also provides a full audit trail of opt-ins and opt-outs that are captured, scanned, imaged, and sent electronically to NBC Bank to track compliance with Reg E. And the bank receives regular reports of all opt-ins and outs. In addition, Wolters Kluwer Financial Services’ warranted compliance documentation helps relieve NBC Bank of any unnecessary risk.

“Community banks like NBC don’t have the resources to meet the Reg E requirements in a timely manner,” said Shelley Gaidaroff, senior vice president and chief operating officer for the bank. “We’re not staffed to continually monitor and track our entire customer base for opt-ins and opt-outs. But by working with Wolters Kluwer Financial Services, we’re confident the process will be quicker, more efficient and allow us to streamline the process internally. We’ll also comply with the regulation while protecting our fee income.”

Gaidaroff added that NBC Bank has trusted Wolters Kluwer Financial Services and a number of its Bankers Systems brand of compliance solutions for nearly a quarter of a century, which made turning to the company for help in complying with the Reg E changes an easy decision.

For more information about Reg E and Wolters Kluwer Financial Services’ Reg E Opt-in Manager solution, visit the company’s Reg E Resource Center at www.WoltersKluwerFS.com/RegE.

About Wolters Kluwer Financial Services

Wolters Kluwer Financial Services provides best-in-class compliance, content, and technology solutions and services that help financial organizations manage risk and improve efficiency and effectiveness across their enterprise. The organization’s prominent brands include Bankers Systems, VMP® Mortgage Solutions, PCi, AppOne®, GainsKeeper®, Capital Changes, NILS, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services is part of Wolters Kluwer, a market-leading global information services company focused on professionals with annual revenues (2009) of €3.4 billion ($4.8 billion), approximately 19,300 employees worldwide and operations in over 40 countries across Europe, North America, Asia Pacific, and Latin America. Visitour website, YouTube or follow @Wolters_Kluwer on Twitter for more information about our market positions, customers, brands, and organization.

NBPCA Supports New Fed Rules under CARD Act

NBPCA Statement in Support of New Rules Issued by FED under CARD Act

 

MONTVALE, N.J., March 24 /PRNewswire/ -- The Network Branded Prepaid Card Association (NBPCA), a non-profit trade association, supports the new rules issued by the Federal Reserve today regarding gift certificates, store gift cards and general use prepaid cards required by the CARD Act.  However, the NBPCA does have significant concerns about the short deadline of August 22, 2010 for companies to make card products that comply with the new rules. The tight deadline will be logistically difficult to meet and may limit consumer access to what are consistently ranked as the most popular gifts during the holiday season. This will be disappointing and inconvenient for consumers and costly for retailers struggling to weather the recession.

"The Network Branded Prepaid Card Association (NBPCA) plans to continue a positive and productive dialogue with lawmakers, regulators and law enforcement to enable consumers to continue to have safe and convenient access to prepaid cards," said Kirsten Trusko, NBPCA President and Executive Director. "Consumer satisfaction with prepaid cards determines the success of our industry. Consequently, we support a regulatory framework that strikes the right balance between consumer protection and a structure allowing businesses to continue to offer these innovative card products in the marketplace."

Each day prepaid cards are used by millions of consumers, businesses and governments as a preferred payment method to reduce fraud and safely and conveniently access funds. Numerous studies indicate prepaid card users are overwhelmingly happy with the products and find their fee structures to be clear, transparent and fair. The NBPCA and its members support many of the new regulations issued on expiration dates, disclosures and fees. In fact, many companies have already implemented many of the new rules, some of which include:

• No more than one fee a month for service fees, including "activity based" fees such as ATM, reload fees, etc.


• Gift cards will now have an expiration date of 5 years from last load - and must be prominently disclosed on the card near the expiration date.


• Free replacement cards must be provided or the card issuer can give the remaining balance to the cardholder.


• A "toll free" telephone number written on the card.


• Pre-purchase disclosures must be made regarding all fees, expiration dates and cannot be changed after purchase.

The NBPCA's primary goal is to ensure consumers continue to be highly satisfied with their prepaid card experiences. The NBPCA remains committed to supporting a regulatory framework where there are fewer, not more, barriers preventing consumers from being able to choose the best possible products in the financial services marketplace.

About the NBPCA

The Network Branded Prepaid Card Association (NBPCA) is a non-profit, inter-industry trade association that supports the growth and success of network branded prepaid debit cards and represents the common interests of the many players in this new and rapidly growing payments category. For additional information, visit www.NBPCA.org.

SOURCE The Network Branded Prepaid Card Association

NBPCA Supports New Fed Rules under CARD Act

NBPCA Statement in Support of New Rules Issued by FED under CARD Act

 

MONTVALE, N.J., March 24 /PRNewswire/ -- The Network Branded Prepaid Card Association (NBPCA), a non-profit trade association, supports the new rules issued by the Federal Reserve today regarding gift certificates, store gift cards and general use prepaid cards required by the CARD Act.  However, the NBPCA does have significant concerns about the short deadline of August 22, 2010 for companies to make card products that comply with the new rules. The tight deadline will be logistically difficult to meet and may limit consumer access to what are consistently ranked as the most popular gifts during the holiday season. This will be disappointing and inconvenient for consumers and costly for retailers struggling to weather the recession.

"The Network Branded Prepaid Card Association (NBPCA) plans to continue a positive and productive dialogue with lawmakers, regulators and law enforcement to enable consumers to continue to have safe and convenient access to prepaid cards," said Kirsten Trusko, NBPCA President and Executive Director. "Consumer satisfaction with prepaid cards determines the success of our industry. Consequently, we support a regulatory framework that strikes the right balance between consumer protection and a structure allowing businesses to continue to offer these innovative card products in the marketplace."

Each day prepaid cards are used by millions of consumers, businesses and governments as a preferred payment method to reduce fraud and safely and conveniently access funds. Numerous studies indicate prepaid card users are overwhelmingly happy with the products and find their fee structures to be clear, transparent and fair. The NBPCA and its members support many of the new regulations issued on expiration dates, disclosures and fees. In fact, many companies have already implemented many of the new rules, some of which include:

• No more than one fee a month for service fees, including "activity based" fees such as ATM, reload fees, etc.


• Gift cards will now have an expiration date of 5 years from last load - and must be prominently disclosed on the card near the expiration date.


• Free replacement cards must be provided or the card issuer can give the remaining balance to the cardholder.


• A "toll free" telephone number written on the card.


• Pre-purchase disclosures must be made regarding all fees, expiration dates and cannot be changed after purchase.

The NBPCA's primary goal is to ensure consumers continue to be highly satisfied with their prepaid card experiences. The NBPCA remains committed to supporting a regulatory framework where there are fewer, not more, barriers preventing consumers from being able to choose the best possible products in the financial services marketplace.

About the NBPCA

The Network Branded Prepaid Card Association (NBPCA) is a non-profit, inter-industry trade association that supports the growth and success of network branded prepaid debit cards and represents the common interests of the many players in this new and rapidly growing payments category. For additional information, visit www.NBPCA.org.

SOURCE The Network Branded Prepaid Card Association

New Overdraft Rules for Debit and ATM Cards

New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. In the coming months, banks, credit unions, and other financial institutions must offer you the ability to make decisions about overdraft services for transactions made with your debit or ATM cards.



Expect your bank to send you an explanation of its overdraft services; here is an example (38 KB PDF). Here are some key things you need to consider when reading the notice:

The basic facts

Types of overdraft services. An overdraft occurs when you make a purchase or ATM transaction but don't have enough money in your account to pay for it. For a fee, your bank's overdraft services will cover you when you become overdrawn. This fee can apply to each time you overdraw your account.

Generally, there are two types of overdraft services:

• Standard overdraft services. Your bank will cover your transaction for a flat fee of about $20-30 each time you overdraw your account. For example, if you make a purchase with your debit card for $150 but only have $100 in your account, your account will be overdrawn by $50 and your bank will charge you a fee. If you then make an ATM withdrawal for $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, if the fee your bank charges for overdraft services is $30, you will pay a total of $60 in fees.


• Overdraft protection plans. Your bank may offer a line of credit or a link to your savings account to cover transactions when you overdraw your account. Banks typically charge a fee each time you overdraw your account, but overdraft protection plans may be less expensive than standard overdraft services.

The new rules

• You choose. In the past, some banks automatically enrolled you in their standard overdraft services for all types of transactions when you opened an account. Under the new rules, your bank must first get your permission to apply these services to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).


• Existing accounts. If you do not opt in (agree), beginning August 15, 2010, your bank's standard overdraft services won't apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don't have enough money in your account, but you will not be charged overdraft fees.


• New accounts. If you open a new account on or after July 1, 2010, your bank cannot charge you overdraft fees for everyday debit card and ATM transactions unless you opt in. If you open a new account before July 1, 2010, your bank will treat you as an existing account holder: you will receive a notice about your bank's overdraft services and will have to decide if you want them for everyday debit card and ATM transactions.


• Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.


• Checks and automatic bill payments. The new rules do not cover checks or automatic bill payments that you may have set up for paying bills such as your mortgage, rent, or utilities. Your bank may still automatically enroll you in their standard overdraft services for these types of transactions. If you do not want your bank's standard overdraft services in these instances, talk to your bank; you may or may not have the option to cancel.

• everyday debit card transactions
  
  purchases made with your debit card on a day-to-day basis (excludes all checks and automatic bill payments)


• overdraft
  
  an overdraft occurs when you write a check, make an ATM transaction, use your debit card to make a purchase, or make an automatic bill payment or other electronic payment for an amount greater than the balance in your checking account


• opt in
  
  giving your bank permission to include you in a particular service


• opt out
  
  declining a particular service offered by your bank

• Bank Accounts and Services


• Credit Cards


• Identity Theft


• Leasing


• Mortgages


• Personal Finance


• Federal Agency Contacts

• New Credit Card Rules

.