Q: If an issuer with consolidated assets of $10 billion or more as of the end of the preceding calendar year acquires an issuer with consolidated assets of less than $10 billion as of the end of the preceding calendar year, by when must the acquiring issuer comply with the interchange fee standards for transactions initiated using cards issued by the previously exempt issuer?
A: Board staff would not recommend that the Board take any administrative action against institutions it supervises for noncompliance so long as the non-exempt issuer complies with the interchange fee standards with respect to the previously exempt cards as soon as reasonably practicable, but generally no later than 30 days after the date the non-exempt issuer acquires the previously exempt issuer. Section 235.5(a) exempts from the interchange fee standards issuers that hold the account being debited and have consolidated assets of less than $10 billion as of the end of the calendar year preceding the date of the electronic debit transaction for which the interchange fee is charged or received. Where an exempt issuer ceases to be a legal entity after acquisition, the acquiring entity becomes the issuer of the previously exempt debit cards. (Added October 24, 2011)
This Q&A was obtained from FRB’s website, in a section for Regulation II (Debit Card Interchange Fees and Routing) Frequently Asked Questions, which may be found here: