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Bachus CUs sold a bill of goods on interchange
Click to view larger imageSpeaking at CUNA’s GAC, Rep. Spencer Bachus (R-Ala.) said that the proposed interchange rule would directly affect the credit unions’ bottom line. He said it is important to the nation’s economic health that credit unions can survive as Main St. financial institutions. (CUNA Photo)
WASHINGTON (3/3/11)--Rep. Spencer Bachus (R-Ala.) told the Credit Union National Association 2011 Governmental Affairs Conference audience that credit unions were “sold a bill of goods” on the proposed interchange rule, which threatens the existence of small financial institutions. “You were sold a bill of goods in October when you were told as credit unions that the interchange fees didn’t apply to you,” Bachus said. “Well, it’s March, and you know it applies to you. “ Bachus said because the interchange rule would directly affect the bottom line of credit unions and small banks--unlike larger financial institutions that offer a wider array of services--smaller credit unions and banks will be less able extend credit to their members and customers. “We know with interchange fees that if we don’t get it right, credit unions and community banks are not going to be there," he said. “And we know that the big banks will." Bachus assured the audience that several senators have talked directly with Sen. Richard Durbin (D-Ill.) about the potential negative effects of the bill. Durbin drafted the interchange language that was folded into the Dodd-Frank Act. Bachus also opined that the newly formed Consumer Financial Protection Bureau unfairly regulates credit unions in the wake of the financial crisis. “You were told the Consumer Financial Protection Bureau wouldn’t apply to credit unions,” Bachus said. “Credit unions didn’t cause what happened in 2008. I have yet to find anyone in or out of Congress that said credit unions did anything to cause or precipitate the financial crisis. "You played by the rules. You kept the rules. Now you’re told because of sins of others you’re going to have to pay for it, just like too big to fail.” As chairman of the House Financial Services Committee, Bachus promised that credit unions would still be offered protection from interest rate increases following the restructuring of Fannie Mae and Freddie Mac, but added it was essential that in the future, institutions that guarantee loans must be responsible for their losses.


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