Durbin Urges The Office Of The Comptroller Of The Currency To Clarify Its Misinterpretation Of Interchange Fees

Press Release

“The OCC either misunderstands or misstates how interchange fees work in its amicus brief in support of several banking associations’ lawsuit opposing the IFPA. First, the OCC has claimed that the IFPA represents a state incursion into ‘national banks’ authority to set fees for services rendered.’ This is incorrect. As the OCC should know, banks do not set interchange fees. Instead, card networks establish interchange fees, and the fees then are received by card-issuing banks on credit and debit card transactions. Centralized fee-fixing by card networks like Visa and Mastercard is structurally anti-competitive, as banks do not compete with one another over the fees they receive, and the OCC should be troubled by this collusive arrangement. At a minimum, the OCC should clarify its inaccurate representation that interchange fees are set by banks.

“The OCC’s apparent misunderstandings or misstatements about interchange fees are particularly troubling because it enforces compliance of the debit interchange fee regulation under the Durbin Amendment for OCC-regulated national banks. Although other enforcement agencies, including the Federal Reserve, Department of Justice, and Federal Trade Commission, have acted when banks and networks have sought to circumvent the Durbin Amendment’s provisions, to my knowledge, the OCC has never taken any such enforcement action. The OCC’s recent statements raise concerns that confusion about interchange fees may be the cause of the OCC’s passivity when it comes to enforcing the Durbin Amendment, and perhaps such confusion also is animating the OCC’s criticism of state efforts to pass reforms that are complementary of, and consistent with, congressional action to address interchange market failures.

“I urge the OCC to clarify the above-mentioned claims and ensure that it is fully informed about interchange fees before publicly commenting on such fees in the future.”

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