Consumer Federation of America and Consumer Reports issue a joint letter to the Federal Reserve System on their proposal to reduce the regulated interchange cap under Regulation II. As drafted, the rule will promote competition, reduce costs for merchants, potentially encourage innovation, increase transparency and reduce market inefficiency. However, The proposed changes to Regulation II could potentially lead to a two tiered banking sector, which reinforces the idea that LMI consumers will have to rely on inferior options, while larger financial institutions with more diversified revenue streams may narrow or limit marketing of their more attractive products and services to affluent customers.