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CUNA ICBA meet with senators on interchange delay
WASHINGTON (4/7/11)—As an outward sign of the crucial nature of the interchange issue, the leaders of community banks and credit unions, in a rare showing, teamed up to visit with key senators to discuss the proposal’s impact on small financial institutions.
Click to view larger image CUNA President/CEO Bill Cheney, right, urges Sen. Susan Collins (R-Maine) to join the list of legislators supporting stopping, studying and starting over on interchange fee cap regulations. (CUNA Photo)
CUNA President/CEO Bill Cheney and Independent Community Bankers of America (ICBA) President/CEO Camden Fine met with Sens. Susan Collins (R-Maine) and Richard Blumenthal (D-Conn.) on Wednesday. Both senators supported Sen. Richard Durbin’s (D-Ill.) interchange fee cap when it was added to the Dodd-Frank Wall Street Reform Package. That interchange amendment, set to go into effect in late July, could lower the amount of transaction fees charged to seven cents per transaction. The interchange legislation would exempt credit unions and other small institutions with assets of $10 billion and under from the terms of the regulations. However, there is much debate over whether this proposed exemption would work as planned. As CUNA and the ICBA noted in the Wednesday meetings with lawmakers,
Click to view larger image Sen. Richard Blumenthal (D-Conn.) is shown between CUNA President/CEO Bill Cheney (right) and ICBA President/CEO Camden Fine (left) as he listens to the two trade association leaders’ outlines of how extensive the negative impact of the debit card interchange fee limit will be for small issuers like credit unions and community banks. (CUNA Photo)
it may not have been clear at the time lawmakers voted in favor of the interchange amendment that the planned $10 billion exemption for small issuers would not even impact portions of the interchange regulations that address routing and exclusivity fees. Cheney emphasized CUNA and ICBA are often on opposite sides of an issue and that the groups’ joint effort on interchange underscores ”how devastating an impact that these proposed regulations would have on small issuers.” CUNA has warned that the arbitrary interchange fee cap does not fully account for the costs of running debit card programs, and many credit unions have said that they would be forced to increase some fees, eliminate certain products and services, and could go so far as cutting staff members or closing down branches if the fee restrictions go through. These types of actions would reduce the level of service provided to members and could prevent some current credit union members from having access to the banking system in general.


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