One in Five Oppose Fed’s Proposed Changes to Regulation II

Only 21% of consumers support the Federal Reserve’s plans to amend the debit card system, according to a survey by Morning Consult on behalf of the American Bankers Association (ABA).

The survey was conducted in the wake of the government’s recent proposal to lower the price cap on the debit interchange merchants pay to process debit card transactions.

The proposal faced criticism from ABA as well as 52 state banker associations due to the unintended negative consequences it would have on community financial institutions.

The report revealed the proposal is lacking support as only 4% of consumers experienced lower prices following the Federal Reserve’s previous price cap on debit interchange rates in 2011.

Even though the price cap promised lower prices for consumers, nearly 10 times as many consumers said prices actually increased.

As a result, only 12% of respondents think retailers will lower prices if the Federal Reserve lowered the cap on interchange rates and 34% think the proposal will result in increased prices.

The proposal is also failing to gather support as the majority of consumers are currently satisfied with the debit card system, which has led to resistance to government interference.

According to the report, 86% of consumers are satisfied with the ease of use when making a purchase with their debit card.

Meanwhile, 81% are happy with the security of their financial information when they use their debit card and 86% are satisfied with the speed of the transaction when using their debit card.

Rob Nichols, president and CEO of ABA, said: “This survey shows the wide disconnect between what retailers have claimed and what consumers have actually experienced. Consumers are happy with their debit card and don’t want the government to interfere in a system that is working extremely well and meeting their payments needs.”