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CUNA responds to Durbin comment on CU credit cards
WASHINGTON (8/5/10)--Credit Union National Association (CUNA) President/CEO Bill Cheney has urged Sen. Richard Durbin (D-Ill.) to “take a more complete look at the facts regarding how credit unions and banks offer credit cards differently” after Durbin recently criticized credit unions for increasing annual fees on credit card accounts. “We believe credit unions should be commended--not condemned--for the way that they offer credit cards to consumers,” Cheney added in a letter sent to Durbin late yesterday. In a statement delivered on the Senate floor this week, Durbin expressed concern with rising consumer fees, detailing one example in which, as reported in The Wall Street Journal, credit union annual fees on credit cards “soared” 67% and the median cash-advance and balance-transfer fees assessed by credit unions “jumped by 33%” between July 2009 and March. Cheney said that in spite of this reported information, a July 22 report by the Pew Charitable Trust found that the average annual fee of credit union-issued credit cards “remains significantly lower than the average annual fee on a bank-issued credit card.” “Further, the average annual fee charged by banks and credit unions has increased nearly the same dollar amount, and this increase for credit unions was a consequence of the effect that the implementation of the CARD Act has had on them,” Cheney said, adding that many credit unions continue to offer “no annual fee” credit card options to their members. Cheney added that Durbin may have incorrectly attributed the median cash-advance and balance transfer fee increases to credit unions, as the Pew report found that the median balance transfer fees charged by credit unions during the time period in question “remained unchanged.” “Regardless of any change, these fees remain significantly lower on credit union-issued credit cards than on bank-issued credit cards,” Cheney said. “It is crystal clear that consumers are better off with a credit union-issued credit card than with a bank-issued credit card. Instead of being criticized for accounting for the impact of newly enacted legislation, credit unions should be commended for all that they have done to keep costs down for their members in a seemingly unending period of increased regulatory burdens,” Cheney added. For the full letter, use the resource link.


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