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Florida FCU to media Interchange cap hurts consumers
TAMPA, Fla. (5/11/11)--A debit card interchange cap of 12 cents per transaction pending in Congress isn’t enough to cover costs of debit card processing and would hurt consumers, a Florida credit union official told newspress.com Sunday. In an article titled, “Debit card use may soon come with a cost,” Linda Darling, chief financial officer at Suncoast Schools FCU in Tampa, Fla., told the newspaper the idea that if merchants are charged less for interchange, they will have lower costs and then offer lower prices hasn’t happened in other countries where debit card interchange fees were reduced. Although the $5 billion-asset Suncoast isn’t against changes in the manner in which interchange fees are assessed, the 12-cent cap per transaction isn’t sufficient for financial institutions to cover costs of debit card processing, Darling added. Consumers already are being harmed because big banks--in anticipation of interchange fee changes--now are charging for checking accounts that used to be free, Darling told the paper. Furthermore, if fees are capped, Suncoast Schools FCU also will be forced to examine changes in free-checking account services it offers members, Darling added. Suncoast has begun a campaign to get its members to call Congress about the matter, she said. To read, the article, 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.
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