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Frank underscores CU exemption from new interchange rules
WASHINGTON (6/30/10)--House Financial Services Committee Chairman Barney Frank (D-Mass.), a central figure in the recently completed House-Senate financial regulatory reform conference report, assured his colleagues that the Federal Reserve’s new rules governing interchange fees would not apply to credit unions or other small institutions with under $10 billion in assets. Frank in a Tuesday notice to House Democrats said that credit unions and other small issuers would be permitted to “continue to issue their debit cards without any market penalty.” Following the release of the letter, the Credit Union National Association (CUNA) said that it planned to work with the Fed to ensure that credit unions with under $10 billion in assets were held exempt from the Fed interchange changes if those changes are passed into law. CUNA President/CEO Dan Mica said Tuesday that the Frank memo would serve as excellent notice of the Congress's strong intent to exempt credit unions and community banks from the reaches of the provision that requires the Fed to set interchange fees. Mica said the memo gives the Fed strong guidance to follow in the event that the provision is enacted and the Fed is called upon to implement it. Negotiations for the financial regulatory reform bill had seemed to have concluded last week, but those negotiations appeared to have reopened on Tuesday. CUNA and credit unions have repeatedly urged legislators to oppose any financial regulatory reform bill that includes interchange provisions, and CUNA continues to present its case for removing interchange changes from the final bill to lawmakers as they continue their discussions. With the majority of the financial regulatory bill agreed to, the bill may still come up for final votes in the House and Senate this week. However, legislators are still finding reaching a final consensus on the exact form of the bill to be difficult. Senators are still tweaking their version of the bill, with conversations a proposed tax on banks looming large. While there have not been a number of changes, one change that may be added prior to the final House and Senate votes is an increase in the assessments imposed by the Federal Deposit Insurance Corporation. The exact timing of a final vote is also put into question by the recent death of long-standing West Virginia Senator Robert Byrd, who died on Monday, aged 92. Byrd will lie in state on the floor of the Senate on Thursday.


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