Regulation II - Debit Card Interchange Fees and Routing (12 CFR Part 235) implements standards for assessing whether interchange transaction fees for electronic debit transactions are reasonable and proportional to the cost incurred by the issuer with respect to the transaction, and establishes rules for payment card transactions as required by section 920(a) of the Electronic Fund Transfer Act (EFTA) (15 U.S.C. § 1693o-2(a)).
Regulation II limits the interchange transaction fee that covered issuers (issuers that, together with affiliates, have assets of $10 billion or more) can charge for electronic debit transactions. Under the rule, a covered debit card issuer is allowed to receive or charge an interchange transaction fee in the amount of 21 cents plus 5 basis points multiplied by the value of the transaction. In addition, a covered issuer may receive or charge an amount of no more than 1 cent per transaction (the fraud-prevention adjustment) for the costs associated with preventing fraudulent electronic debit transactions (fraud-prevention adjustment) if the issuer complies with the standards and requirements set forth in the rule. In addition to these interchange fee provisions, Regulation II prohibits any issuer (i.e., not just covered issuers) or payment card network from directly or indirectly restricting the number of payment card networks on which an electronic debit transaction may be processed to less than two unaffiliated networks, and from directly or indirectly inhibiting the ability of a merchant to direct the routing of electronic debit transactions for processing over any payment card network that may process such transactions. Finally, Regulation II prohibits any issuer from receiving net compensation from a payment card network with respect to electronic debit transactions or debit card-related activities within a calendar year.
Debit card issuers must retain records demonstrating their compliance with the requirements in Regulation II for at least five years after the end of the calendar year in which the electronic debit transaction occurred. In addition, any person (including an issuer or payment card network) subject to an investigation or enforcement proceeding involving Regulation II must retain records pertaining to the matter until the final disposition of the matter, unless an earlier time is allowed by court or agency order. The Paperwork Reduction Act (PRA) classifies reporting, recordkeeping, or disclosure requirements of a regulation as an information collection.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
FRII_20220726_omb.pdf
Disclosure Sections 235.4(c) and (d) Annual fraud-prevention compliance notification and change-in-status notification