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News Now

Washington
Collins strips interchange ban from appropriations bill
WASHIINGTON (7/30/10)--Sen. Susan Collins (R-Maine) Thursday successfully offered an amendment to an appropriations bill that struck language that would have banned payment card networks from charging the federal government a credit card interchange rate higher than the lowest interchange rate available on the market. The Collins amendment, supported by the Credit Union National Association (CUNA), instead instructs the Government Accountability Office (GAO) to conduct a study on the feasibility of allowing the federal government to impose convenience fees for the use of credit cards for the purchase of goods and services. John Murphy and the Maine league also worked closely with the senator. CUNA President/CEO Bill Cheney underscored, "While we know the interchange battle will continue on other legislation, this is an important victory and we are very appreciative of Senator Collins's leadership on this issue." The amendment was passed by the Senate Appropriations Committee by voice vote. In backing the amendment, CUNA said in the a letter to Collins, that proponents of recent interchange language in the Dodd-Frank Act, which allows the government to set interchange fees, “profess that their intent is not to harm small issuers.” Cheney wrote, “The stinging impact of the reduction of interchange fee revenue hits the smaller institutions disproportionately, and, in the case of credit unions, trickles down to the credit union member. “Large for-profit institutions can more easily absorb a reduction in interchange fee revenue; and, inasmuch as the interchange fee is a fee paid to the issuer, the impact on the payment card networks is negligible. The erosion of interchange fee revenue seriously threatens credit unions’ ability to offer low-cost access to financial services that is often much lower than what banks offer.” Also of interest to credit unions in the bill before the Appropriations Committee are provisions that would set funding for the U.S. Treasury Department Community Development Financial Institutions (CDFI) Fund, and the National Credit Union Administration's Community Development Revolving Loan Fund (CDRLF), and Central Liquidity Facility.


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