PLYMOUTH, Mich. (5/10/11)--Capping debit card interchange fees could have unintentional consequences that would diminish important services that credit union members and small businesses depend upon, a Michigan credit union CEO wrote in a Sunday letter to the editor in the Lansing State Journal. “Government should not choose winners and losers in the marketplace,” wrote Steve Winninger, CEO of Lake Trust CU in Plymouth, Mich. “The Durbin amendment to last year’s Wall Street reform legislation does just that, and must be delayed, studied and fixed. The amendment was passed quickly without hearings. If it goes into effect in July, retailers will get $20 billion per year. Good for them, but bad for consumers. “Unfortunately, capping the charge retailers pay for each consumer debit card swipe will have the unintended consequence of squeezing consumers by potentially endangering vital services such as free checking, which millions of credit union families and small businesses count on,” he added. “For their debit card programs, credit unions absorb all the risks and costs of fraud,” Winninger wrote. “By cutting interchange fees by 75%, financial institutions of all sizes will feel an immediate impact and may be forced to cut programs rather than supporting consumers and making loans to help the economy. It will hurt those who can afford it the least--low-income households with basic checking accounts.” To read the letter to the editor, use the link. The Credit Union National Association (CUNA) opposes a proposal in Congress capping interchange fees and has told federal lawmakers that such action would harm consumers by driving up costs of debit cards, limiting consumer options, and harming competition and technological innovation. Interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants, CUNA said.