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News Now

Washington
Mica Interchange plan is pro-merchant anti-consumer
WASHINGTON (6/15/10)--Credit Union National Association (CUNA) President/CEO Dan Mica said Monday that CUNA and credit unions just do not agree with a key senator's view that interchange legislation will be "good for consumers." Mica was commenting on a letter he received Friday from Sen. Richard Durbin (D-Ill.), in which Durbin stated that the changes that his legislation would bring to the interchange fee system would benefit consumers. Durbin also addressed his letter to Camden Fine, President/CEO of the International Community Bankers Association. "We appreciate Sen. Durbin's comments," Mica said in a statement. "However, we just cannot agree with his view that the change is good for consumers." Mica noted that someone has to pay to provide this service, which clearly benefits the merchants, and credit unions cannot absorb the costs under the strictures of this proposed law. "Those costs will be borne by consumers – members of credit unions. That is not a good outcome for them or for credit unions,” Mica added. Durbin’s legislation, which was added to the Senate version of regulatory reform just prior to passage, would ask the government to control interchange fees. While Durbin has touted a carve out that would exempt financial institutions with under $10 billion in assets from the terms of the interchange legislation, CUNA and others have said that that carve out would not be meaningful because there is no requirement for the payment card networks to operate a higher rate system for small issuers. The House version contains no interchange language, and over 100 House members from both major political parties last week urged their congressional colleagues not to include language on interchange fees in the final bicameral legislative package. That “dear colleague” letter, which was offered up by Reps. Debbie Wasserman Schultz (D-Fla.) and Kenny Marchant (R-Texas), followed several days of direct credit union advocacy in the form of a national fly-in. Over 1,000 credit union activists met directly with their legislators, and a further 500,000 credit union backers have contacted their legislators to urge them to oppose the interchange provisions. Members of the media have also challenged assertions that the interchange alteration would be good for consumers, with an Investor’s Business Daily editorial stating that large retailers, including Walgreen’s, would win out over small businesses and consumers. Those retailers would simply “shift their costs of processing credit and debit cards to consumers,” the editorial added. (For the full story, use the resource link.) Mica said that CUNA and other credit union representatives will continue to press their concerns on Congress about the interchange language. Interchange fee legislation should be taken up by the conference committee early next week.
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