ATHENS, Ga. (3/28/11)--While many questions still surround the implementation of the interchange rule, Marshall Boutwell shared a gut feeling with a Georgia newspaper that probably sums up what many people in the credit union industry are thinking about the rule. “There’s no free lunch,” Boutwell, CEO of $160 million-asset Gwinnett FCU, Lawrenceville, Ga., told the Athens Banner-Herald (March 20), not once, but twice. While the interchange rule includes an exemption for financial institutions under $10 billion, until the rule is redrafted, credit union executives like Boutwell fear its negative--even if unintended--consequences. The Credit Union National Association (CUNA) has estimated that up to 67% of credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenues by 40%. Boutwell told the paper the value of the member service that credit unions have built their reputation on is likely to be put to the test because of these consequences. Local banks and credit unions will likely have to charge additional fees to cover the lost revenue that results from the interchange rule, though credit union fees are likely to be a bit lower than those of large banks. But Boutwell is just as concerned about the potential “blow-back” from big retailers. He fears big box retailers like Wal-mart will refuse to pay 44 cents for debit card purchases drawn on credit union accounts when they only have to pay 12 cents if the their customers are using cards from big banks. In the end, the retail customer will have to pay the fee to the retailer when she swipes her card, or to her financial institution in the form of higher fees. Once again, Boutwell said, “no free lunch--for credit unions or consumers. And, unless the rule is rewritten, he remains fearful, he told the paper. CUNA has repeatedly said that to ensure that the planned exemption is effective, Congress should halt the progress of the interchange rule. Both the House and Senate have pending bills that would delay implementation. If an agreement to delay implementation cannot be reached, CUNA has called on the Fed to do all it can to ensure that the proposed exemption works as Congress said it would.