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Consumer choice imperiled by interchange amendment CUNAICBA
WASHINGTON (5/28/10)--Consumers could lose important card choices if the U.S. Congress allows government intervention in setting interchange fees, and the Credit Union National Association (CUNA) and Independent Community Bankers of America (ICBA) urged House members to reject interchange provisions in a final financial regulatory reform bill. The joint letter, signed by CUNA President/CEO Dan Mica and ICBA President/CEO Camden Fine and sent today, reaches House legislators as they suit up to reconcile differences between the House-approved reg reform bill and one approved just last week by the Senate, which included an interchange provision. The interchange amendment would dramatically alter the electronic payments system, the letter warns lawmakers, and make it very difficult for card-issuing credit unions and community banks to continue to provide a wide array of products and services to consumers. Furthermore, the missive says, the Senate adopted the amendment without any hearing on its on consumers or the market, and in the face of tremendous political pressure from merchants “intent on passing their costs off on others,” including consumers. On the latter point, the trade groups describe a long history of the merchants trying to do just that: “Whether through pending class action litigation in federal court, legislation in the states, or pending bills in the House, the merchants have pursued a number of different attacks on our institutions’ ability to serve consumers, in addition to the recent expansive and harmful Senate amendment.” The Senate interchange language would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions, which, the letter says, forces the Fed into the role of a price-fixing body, when interchange fees sound be driven by market forces. “Our institutions—with their exclusive focus on local communities, underserved populations, and rural areas—issue debit and credit cards as a service to their local customers, and they continue to do so fairly and honestly, often with better rates and terms than can be found at larger institutions. “The key that makes this possible is the existing interchange system, which allows community banks and credit unions to compete directly with the largest banks in the debit and credit card marketplace,” the joint letter argues. For more, use the resource link below.


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