Durbin Amendment June 2011

Durbin Amendment Milestones 2 ENACT President Obama signs Dodd-Frank law which directs Fed to propose Durbin Guidelines PROPOSE Federal Reserve publishes recommended guidelines COMMENT Proposed guidelines open for public comment until February 22, 2011 FINALIZE Durbin Amendment delays defeated June 8, 2011 IMPLEMENT Regulated interchange effective July 21, 2011 IMPLEMENT Exclusivity and merchant routing effective October 2011 (proposed guidelines, option A) Dec 2010 Feb 2011 June 2011 July 2011 July 2010 An amendment to limit interchange fees for debit transactions, the “Durbin Amendment” as part of the of the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted into law July 2010 and will be effective July 21, Oct 2011

For internal use only 3 Regulated Interchange – Impacts FIs with assets of $10B and greater – Currently proposed at $0.12 maximum rate (subject to final Fed review and ruling) – Interchange restricted for debit and single load prepaid programs. – Government, general purpose reloadable prepaid and credit card programs are excluded Exclusivity – Impacts all FIs – FIs must maintain at least two debit network relationships – Networks with POS access to DDAs for purchases o No distinction between signature and PIN authentication – The two networks must not be affiliated o MasterCard® signature/Maestro® PIN or Visa® signature/Interlink PIN Merchant Controlled Network Routing – Impacts all FIs – Issuers can no longer designate routing preference between networks – Multiple PIN network relationships will likely result in reduced interchange revenue Durbin Amendment Key Provisions

4 4 Alternative A – One signature and one PIN based debit network o Must be unaffiliated providers o Virtually eliminates negative impacts of merchant controlled routing o Relatively easy implementation, proposed effective Oct 2011 – LIKELY EXCLUSIVITY REQUIREMENT Alternative B – Two signature and two PIN based debit networks o Merchants would have at least two routing options in both the signature and PIN channels o Would allow for aggressive “race to the bottom” interchange competition between the networks – dramatically reducing issuer revenue o Operational challenges, proposed effective Jan 2013 – UNLIKELY THAT THIS OPTION WILL BE REQUIREMENT Exclusivity Two Potential Options

For internal use only 5 Response to Durbin Provisions Regulated Interchange Interchange capped at $0.12. Restricted for signature and PIN debit transactions and single load prepaid programs Any FI debit issuer with assets of $10B and greater Impacted Institutions NYCE is the most competitive unaffiliated network option providing maximum interchange value Supplement revenue from unregulated income streams via additional income from Prepaid, Credit and Loyalty Response

For internal use only 6 Response to Durbin Provisions Exclusivity FIs must maintain at least two unaffiliated debit networks Any FI that uses either MasterCard/Maestro or Visa/Interlink as their sole debit provider Impacted Institutions Join a PIN debit network unaffiliated with MasterCard or Visa NYCE is the most competitive unaffiliated network option providing maximum interchange value Response

For internal use only 7 Response to Durbin Provisions Merchant Routing Merchants can route debit transactions to any network Any FI with more than one PIN debit network will likely see interchange fall as networks compete for volume Impacted Institutions NYCE is the most competitive unaffiliated network option providing maximum interchange value Response

For internal use only NYCE Payments Network Issue the Card Size & Scale Consistent Service Coverage in all 50 States 360,000 ATMs 22,500 Surcharge- Free ATMs 2 million POS Locations 1,400 Direct Billers Industry Leading Availability Issuer-Centric to optimize existing card base transactions Drive migration of expense-based transactions to higher value forms of payment 83% exclusive Transactions A Non-Competing Network Real-Time Fraud Monitoring and Management Text and Mobile Applications Consistent record of Innovation Approval Rate Management No Impact to Cardholders during Implementation Fully engaged with merchants Reporting and Data Integration 8 Strategic Focus Advanced Functionality

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