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Cheney Merchants mislead on interchange
WASHINGTON (4/6/11)--Also on the interchange front today, Credit Union National Association (CUNA) President/CEO Bill Cheney is featured in a USA Today editorial urging readers not to be swayed by retailers misleading rhetoric, which obfuscates the interchange debate. Cheney in his editorial noted that while some claim that arguing against the Federal Reserve’s interchange cap regulations means supporting “bank bailouts” or lining the pockets of Wall Street bankers, that claim leaves out one important detail: small institutions, including credit unions and community banks, “are Main Street.” “Nobody is lining our pockets,” he added. And while merchants and others have claimed that allowing the Fed to cap interchange fees would be “pro consumer,” Cheney noted that the proposed law would “have a profound impact on how members are served by their credit unions, likely forcing them to charge new and unwanted fees for debit cards.” “That's not ‘pro-consumer,’" he said. Cheney in his editorial reiterated CUNA’s call to stop, study and start over on interchange fee legislation. “Before the law and rules take effect, the impact on consumers — including 92 million credit union members — should be properly explored,” he said. Some of the effects of this legislation are already known: Funds that credit unions use to cover the cost of offering and maintaining debit card accounts will be curbed. Cheney noted that recovering debit-related costs “might not be a big deal” for the big banks. “They already charge very high fees, and some have said that free checking is a thing of the past,” he said. However, Cheney warned that “member-owned, not-for-profit credit unions might also have to pass the costs on to their members — as lower return on savings or as fees on debit cards or other transactions.” “It's the last thing credit unions want to do, but they might have no choice,” he said. Legislation introduced by Rep. Shelley Moore Capito (R-W.V.) would delay interchange rate cap implementation by one year while the Fed studies interchange's impact on consumers, credit unions and merchants. That legislation has 71 cosponsors, including former House Financial Services Committee Chairman Barney Frank (D-Mass.). Sen. John Tester's (D-S.D.) bill, which would order a similar study and would delay implementation by two years, has 17 cosponsors. CUNA, credit unions and credit union leagues are offering a host of new resources that will help consumers engage their congressional representatives on this crucial issue. For the USA Today editorial and more on CUNA’s grassroots interchange action, use the resource links.
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