Originally, the Federal Reserve set the deadline for when it would enact a rule limiting swipe fees for debit card transactions on April 21, but now the central bank says this date will come and go without finalizing it, according to a report from Reuters. The reason for the delay is that the Fed received more than 11,000 official letters commenting on the effects the rule change would have, and needs to study them more carefully, chairman Ben Bernanke recently announced. But despite the delay, the Fed noted it will have the rule finalized and in place by July 21, the deadline originally set by lawmakers.
However, by delaying the change even for a few months, the Fed has put the rule change itself in peril, the report said. Already, lobbying efforts by the banking industry against the new regulation have been significant, and are only likely to further increase during the next few months.
"It's a win for the banks and the various entities that were trying to introduce changes in the law," Tom Layman, a former chief economist for Visa who now runs the payments consulting firm Global Vision Group, told the news agency.
Those in the banking industry say this change, in addition to various other consumer protections against significant credit card debt introduced by lawmakers, will cost financial institutions billions of dollars per year, the report said. In particular, banks have lobbied for the rule change to be delayed for up to several years while the effects of these changes are studied more closely.
However, those who backed the bill, particularly those in the Democrat-controlled Senate, believe that the protections are necessary for consumers, as they could lead to lower prices from retailers and, in turn, less credit card debt, the report said.
More rules related to Americans' credit card debt are expected to be added when the Consumer Financial Protection Bureau gains formal regulatory power over the lending industry in July.