Federal Reserve System August 3, 2012 – Federal Register Recent Federal Regulation Documents

Notice of Proposals To Engage in or To Acquire Companies Engaged in Permissible Nonbanking Activities
Document Number: 2012-18933
Type: Notice
Date: 2012-08-03
Agency: Federal Reserve System, Agencies and Commissions
Formations of, Acquisitions by, and Mergers of Bank Holding Companies
Document Number: 2012-18932
Type: Notice
Date: 2012-08-03
Agency: Federal Reserve System, Agencies and Commissions
Debit Card Interchange Fees and Routing
Document Number: 2012-18726
Type: Rule
Date: 2012-08-03
Agency: Federal Reserve System, Agencies and Commissions
The Board has amended the provisions in Regulation II (Debit Card Interchange Fees and Routing) that govern adjustments to debit card interchange transaction fees to make an allowance for fraud- prevention costs incurred by issuers. The amendments permit an issuer to receive or charge an amount of no more than 1 cent per transaction (the same amount currently permitted) in addition to its interchange transaction fee if the issuer develops and implements policies and procedures that are reasonably designed to take effective steps to reduce the occurrence of, and costs to all parties from, fraudulent electronic debit transactions. The amendments set forth fraud- prevention aspects that an issuer's policies and procedures must address and require an issuer to review its policies and procedures at least annually, and update them as necessary in light of their effectiveness, cost-effectiveness, and changes in the types of fraud, methods used to commit fraud, and available fraud-prevention methods. An issuer must notify its payment card networks annually that it complies with the Board's fraud-prevention standards. Finally, the amendments provide that an issuer that is substantially noncompliant with the Board's fraud-prevention standards is ineligible to receive or charge a fraud-prevention adjustment and set forth a timeframe within which an issuer must stop receiving or charging a fraud-prevention adjustment.