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NCUA seeks small-issuer interchange exemptions
ALEXANDRIA, Va. (2/17/11)--The Federal Reserve should add “meaningful exemptions for smaller card issuers” to its current interchange fee proposal, National Credit Union Administration (NCUA) Chairman Debbie Matz said in a letter to Fed Chairman Ben Bernanke. Credit Union National Association (CUNA) President/CEO Bill Cheney called Matz’s comments “a good step” into the interchange fee discussion. Matz in the letter also called on the Fed to reflect portions of the Dodd-Frank Wall Street Reform Act that address small institution pricing issues. Matz added that Dodd-Frank explicitly exempts card issuers with total assets under $10 billion from any interchange fee regulation, and said that credit unions should be exempted from requirements related to network exclusivity and routing restrictions as well. Failure to exempt credit unions from these requirements “could significantly increase both fixed and variable costs for these small institutions, resulting in an inability to remain competitive with larger card issuers,” Matz said. Cheney also noted Matz’s “well-considered remarks with regard to routing and exclusivity,” and commended the NCUA for the timeliness of the remarks. The House financial institutions and consumer credit subcommittee has scheduled a hearing on the economic impact of interchange fee changes for later today. Allied CU President/CEO Frank Michael will testify on behalf of his Stockton, Calif.-based credit union and CUNA during the hearing. (See related story: CUNA to Congress: Stop, study, start over on interchange) For the NCUA release, use the resource link.
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