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Senators urge greater interchange consideration
WASHINGTON (UPDATED: 1:15 P.M. ET)--In an action strongly encouraged by the Credit Union National Association (CUNA), 13 senators late last week wrote to the Federal Reserve to voice their concerns over proposed interchange regulations. The letter, which was delivered to Fed Chairman Ben Bernanke on Thursday, encourages the Fed to “take sufficient time to gather and analyze all of the relevant facts” before issuing a proposal, and to “ensure that consumer interests are protected” in any rate standards that are set. Sens. David Vitter (R-La.), Thomas Carper (D-Del.), Judd Gregg (R-N.H.), Chris Coons (D-Del.), Pat Roberts (R-Kan.), Evan Bayh (D-Ind.), Mark Warner (D-Va.), Richard Shelby (R-Ala.), Robert Bennet (R-Utah), Jon Tester (D-Mont.), Mike Crapo (R-Idaho), Sam Brownback (R-Kan.), and Bob Corker (R-Texas) cosigned the letter. The interchange provisions, which were passed as part of comprehensive financial regulatory legislation earlier this year, direct the Fed to write rules on interchange fees for debit card purchases. While the interchange provision exempts small credit unions and other financial institutions with under $10 billion in assets from any interchange changes, these institutions would still be impacted directly by whatever rates are established. The letter noted that while many have assumed that the $10 billion threshold would in effect “level the playing field” for smaller institutions, the interchange amendment could make credit union and small bank cards more expensive for merchants to accept, putting smaller institutions at a competitive disadvantage. CUNA Senior Vice President of Legislative Affairs John Magill on Friday said that CUNA has been "actively working with a number of Senators to weigh in on this issue. “Their views on taking an adequate amount of time in considering these proposals -- considering the impact on small institutions such as credit unions -- need to be carefully considered by the Fed governors before they take action," Magill added.


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