Regulation II: Interchange Fees

Question 1

Allows issuers to recover an interchange fees on each transaction equal to the sum of

• __ cents; plus
• __ basis points (__%) of the transaction amount; plus
• __ cent, for issuers that comply with specified fraud prevention requirements.

Answer 1

21
5 (0.05%)
1

Question 2

Under Reg II, debit cards must be functional on at least __ unaffiliated payment card networks.

Answer 2

2

Question 3

What is the small issuer exemption?

Answer 3

Banks under $10 billion are not subject to the fee restrictions under this regulation.

Question 4

Regulation II (Debit Card Interchange Fees and Routing Regulation) restrictions on interchange transaction fees does not apply to issuers that:

a. Together with affiliates, have assets of less than $10 billion
b. Have assets of $1 billion or less
c. Are part of a holding company that has total assets of less than $1 billion
d. Issue less than 5,000 debit cards

Answer 4

a. Together with affiliates, have assets of less than $10 billion

Question 5

Regulation II permits an issuer to receive an adjustment of 1 cent to its interchange transaction fee if:

a. It issues only government-administered payment programs and certain reloadable general-use prepaid cards not marketed as gift cards
b. It develops and implements policies and procedures reasonably designed to identify and prevent fraudulent electronic debit transactions
c. It discloses the fee to consumers prior to account opening
d. The transaction is conducted outside the issuer’s home state

Answer 5

b. It develops and implements policies and procedures reasonably designed to identify and prevent fraudulent electronic debit transactions