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Washington
Mica Interchange amendment hurts CU capital condition
WASHINGTON (5/24/10)--In a Friday letter sent to U.S. Treasury Secretary Tim Geithner, Credit Union National Association (CUNA) President/CEO Dan Mica said that Sen. Richard Durbin’s (D-Ill.) interchange amendment would “not only exacerbate” capital pressures for many credit unions, “but also will severely limit the ability to build and maintain capital of all the approximately 5,000 well-capitalized credit unions that offer debit cards.” While the majority of the regulatory restructuring legislation “will result in a balanced approach to a range of issues involving consumer protection and proper oversight of financial activities and large banks,” Mica said that CUNA “cannot support the interchange provisions included in the Senate bill” and must do all it can “to remove or improve them.” Again noting the “balance” that was achieved in many parts of the bill, Mica encouraged Geithner to help credit unions “pursue a favorable outcome on the interchange amendment.” Mica also urged the Treasury to support CUNA's efforts to protect credit unions to ensure consumers have viable choices in the financial marketplace. One step that CUNA is taking to respond to the Senate-passed legislation is encouraging credit union supporters to engage their elected representatives and urge them to oppose the interchange alterations. (See related story, Credit unions prepare full grassroots alert over interchange) Mica’s letter was also sent to House Financial Services Chairman Rep. Barney Frank (D-Mass.), House Capital Markets Subcommittee Chairman Rep. Paul Kanjorski (D-Pa.), National Credit Union Administration Chairman Debbie Matz, and Treasury Assistant Secretary for Financial Institutions Michael Barr. The letter noted that CUNA has “tried hard to avoid emotionalism and hyperbole in the deliberations regarding the regulatory restructuring bill.” However, Mica said, “It is no exaggeration that the impact of the interchange amendment will be severe across the credit union system and will result in limiting consumer choices in some areas.” Mica also called for more “meaningful capital reform” for credit unions to grant credit unions “a better definition of capital and mechanisms to raise additional capital.” For the full letter, use the resource link.


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