FTC Investigating Payment Card Network Rules

The Federal Trade Commission is investigating payment card network rules to see if they violate the Durbin Amendment, according to a recent FTC report to the Senate Appropriations Committee. The report notes the commission held a series of retailer conferences in which merchants raised issues over new card network rules and fees imposed in autumn of 2011, which led to the FTC’s current probe of payment card networks’ possible violation of Durbin Amendment debit interchange regulations or routing rules. Although the Senate Appropriations Committee was concerned that the amendment’s rules might reduce debit interchange revenue for community banks and credit unions exempt from the regulations, the FTC found no indications of such declines following Durbin’s enactment. “Now that merchants have new choices for routing to lower-cost processors, it appears that payment card networks and other processors have begun to compete for merchant business by offering a range of interchange rates,” the FTC observes. The FTC report also cites several cases in which the commission enforced rules against payment processors that allegedly engaged in unlawful debit card business practices.

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From “FTC Reports on Durbin Enforcement”
Green Sheet (12/31/12)