NBPCA sees problems in proposed swipe fee reform

The Network Branded Prepaid Card Association voiced concern over "operational flaws" in the Federal Reserve's recently announced debit card interchange fee structure and network routing proposals designed to implement the Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The NBPCA said flaws in the Fed's proposed rulemaking, such as requiring gift cards and flexible spending account cards to include PIN-based debit features, would create inefficiencies, increase fraud risks and raise costs for issuers that would be passed on to consumers.

According to the NBPCA, particularly worrying for the prepaid card industry is that the proposed rules do not clarify how exemptions in the Durbin amendment for government benefits and general-purpose, reloadable prepaid cards would be implemented by the card brands under the proposed interchange fee cap rule.

Kirsten Trusko, NBPCA President and Executive Director, said failure to clarify how exemptions will be handled in the final rule could "reduce the availability of prepaid cards, resulting in a catastrophic impact on consumers and governments."

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