Section 235.5 - Exemptions(a)Exemption for small issuers -(1)In general. Except as provided in paragraph (a)(3) of this section, §§ 235.3 , 235.4 , and 235.6 do not apply to an interchange transaction fee received or charged by an issuer with respect to an electronic debit transaction if-(i) The issuer holds the account that is debited; and(ii) The issuer, together with its affiliates, has assets of less than $10 billion as of the end of the calendar year preceding the date of the electronic debit transaction.(2)Determination of issuer asset size. A person may rely on lists published by the Board to determine whether an issuer, together with its affiliates, has assets of less than $10 billion as of the end of the calendar year preceding the date of the electronic debit transaction.(3)Change in status. If an issuer qualifies for the exemption in paragraph (a)(1) in a particular calendar year, but, as of the end of that calendar year no longer qualifies for the exemption because at that time it, together with its affiliates, has assets of $10 billion or more, the issuer must begin complying with §§ 235.3 , 235.4 , and 235.6 no later than July 1 of the succeeding calendar year.(4)(i)Temporary relief for 2020 and 2021. Except as provided in paragraph (a)(4)(ii) of this section, for purposes of determining eligibility for the exemption for small issuers described in paragraph (a)(1) of this section, issuer asset size that is calculated as of the end of the calendar year 2020 shall be determined based on the lesser of:(A) The assets of the issuer, together with its affiliates, as of the end of the calendar year 2019; and(B) The assets of the issuer, together with its affiliates, as of the end of the calendar year 2020.(ii) The relief provided under this paragraph (a)(4) does not apply to an issuer if the Board determines that permitting the issuer to determine its assets in accordance with that paragraph would not be commensurate with the asset profile of the issuer. When making this determination, the Board will consider all relevant factors, including the extent of asset growth of the issuer since December 31, 2019; the causes of such growth, including whether growth occurred as a result of mergers or acquisitions; whether such growth is likely to be temporary or permanent; whether the issuer has become involved in any additional activities since December 31, 2019; the asset size of any parent companies; and the type of assets held by the issuer. In making a determination pursuant to this paragraph (a)(4)(ii), the Board will apply notice and response procedures in the same manner and to the same extent as the notice and response procedures in 12 CFR 263.202 .(b)Exemption for government-administered programs. Except as provided in paragraph (d) of this section, §§ 235.3 , 235.4 , and 235.6 do not apply to an interchange transaction fee received or charged by an issuer with respect to an electronic debit transaction if-(1) The electronic debit transaction is made using a debit card that has been provided to a person pursuant to a Federal, State, or local government-administered payment program; and(2) The cardholder may use the debit card only to transfer or debit funds, monetary value, or other assets that have been provided pursuant to such program.(c)Exemption for certain reloadable prepaid cards - (1)In general. Except as provided in paragraph (d) of this section, §§ 235.3 , 235.4 , and 235.6 do not apply to an interchange transaction fee received or charged by an issuer with respect to an electronic debit transaction using a general-use prepaid card that is- (i) Not issued or approved for use to access or debit any account held by or for the benefit of the cardholder (other than a subaccount or other method of recording or tracking funds purchased or loaded on the card on a prepaid basis);(ii) Reloadable and not marketed or labeled as a gift card or gift certificate; and(iii) The only means of access to the underlying funds, except when all remaining funds are provided to the cardholder in a single transaction.(2)Temporary cards. For purposes of this paragraph (c), the term "reloadable" includes a temporary non-reloadable card issued solely in connection with a reloadable general-use prepaid card.(d)Exception. The exemptions in paragraphs (b) and (c) of this section do not apply to any interchange transaction fee received or charged by an issuer on or after July 21, 2012, with respect to an electronic debit transaction if any of the following fees may be charged to a cardholder with respect to the card:(1) A fee or charge for an overdraft, including a shortage of funds or a transaction processed for an amount exceeding the account balance, unless the fee or charge is imposed for transferring funds from another asset account to cover a shortfall in the account accessed by the card; or(2) A fee imposed by the issuer for the first withdrawal per calendar month from an ATM that is part of the issuer's designated ATM network. 76 FR 43466 , July 20, 2011, as amended at 85 FR 77362 , Dec. 2, 2020