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Congress this week CUNA to testify on interchange CARD Act
WASHINGTON (10/6/09)—Among items of interest on Capitol Hill for credit unions this week, Mark Caverly of Local Government FCU is scheduled to testify Thursday at a hearing on interchange fees. He will speak on behalf of the Credit Union National Association (CUNA) and the Electronic Payments Coalition. Caverly, executive vice president of the Raleigh, N.C.-based credit union, will testify before the House Financial Services Committee on H.R.2382, the Credit Card Interchange Fees Act of 2009 and H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009. The proposed interchange bill would amend the Truth in Lending Act to prohibit certain electronic payment system network practices and required increased disclosures. The Credit Union National Association (CUNA) has publicly stated that changing the current interchange fee structure, as some merchants, including 7-Eleven, have promoted doing, would adversely limit consumer options, competition and technological innovation. CUNA believes interchange fees allow business costs, including the risk of consumer nonpayment, to be shared by the payments participants and discussions regarding what value should be placed on the use of electronic payments should be within the purview of the industry participants. Legislation that would allow merchants to negotiate interchange fees has also been introduced in the Senate, but it is expected that neither H.R. 2382 nor the Senate-based legislation will be brought up for a vote during the fall session. Regarding H.R. 3639, that bill would move up the effective date of some portions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act to December of this year. Bill sponsor Rep. Carolyn Maloney (D-N.Y.) has said that the "breadth and depth" of interest-rate hikes that credit card companies are imposing ahead of the full imposition of the CARD Act points to the need for "faster consumer protections." Ryan Donovan, CUNA vice president of legislative affairs, has said the outlook for the legislation is uncertain. "The legislation seeks to move a February effective date up to this December, which is only about 10 weeks from now. In order for the bill to become law in that timeframe, it would seem that the bill would need to move through the legislative process at incredible speed," he noted. Other items of credit union interest on Capitol Hill this week included:
* On Tuesday, a Senate Small Business and Entrepreneurship Committee hearing titled The Recovery Act for Small Businesses: What is Working and What Comes Next?; * On Wednesday, a Senate Banking subcommittee hearing titled Securitization of Assets: Problems and Solutions; * On Thursday, in addition to Caverly’s appearance before House Financial Services, the Senate Banking Committee hearing will look at "The Future of the Mortgage Market and the Housing Enterprises”; and * On Friday, a different Senate Banking subcommittee has scheduled a hearing on the topic of restoring credit to manufacturers.
CUNA is a member of the Electronic Payments Coalition.
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