WASHINGTON—The Federal Reserve’s debit interchange proposal could undermine recent progress in bringing low- and moderate-income (LMI) consumers into the financial services system, a bipartisan group of representatives wrote Federal Reserve Chair Jerome Powell this week.
The letter comes amidst strong credit union opposition to the proposal, and a bill was introduced this week to delay the rule until its implementation can be studied.
‘Threatens to Undo Important Work’
“The Regulation II price cap proposal threatens to undo the important work that banks, credit unions, and community groups have undertaken to expand access to safe and affordable Bank On-certified accounts,” the legislators wrote, referring to an account certification standard for low or zero-fee accounts must include “online bill pay, allow accountholders to receive payments and income securely, and have no overdraft fees.”
The lawmakers thanked the Fed for extending the proposal’s comment period to May 12, but urged it “to ensure that the final rule does not unintentionally impact low-and moderate-income consumers negatively.”
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