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Tester repeats call for interchange implementation stall
WASHINGTON (4/18/11)--Sen. Jon Tester (D-Mont.) last week again called for further consideration of an interchange fee cap proposal, saying in a Thursday floor statement that Congress needs to stop, study and “make sure [it is] doing the right thing” before moving forward. “If we do not measure twice and cut once, we’re bound to create a whole new set of problems,” he added. Tester, along with Sen. Bob Corker (R-Tenn.), has introduced legislation that would delay implementation of the interchange legislation by two years and would order federal regulators to study the impact that the interchange changes could have on consumers, financial institutions, and others. The legislation, S. 575, had 16 co-sponsors as of Friday. The interchange provisions, which could become effective in late July, could lower the amount of transaction fees charged to seven cents per card swipe. The legislation, as currently written, would exempt credit unions and other small institutions with assets of $10 billion and under from the terms of the regulations. However, there is much debate over whether this proposed exemption would work as planned. The senator noted that federal regulators, including Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair, have publicly questioned whether small issuers would benefit from this exemption. Tester in his comments also said that while backers of the interchange legislation claim that it would help small businesses, it can actually present greater problems for them by potentially limiting their access to free checking accounts. “This notion that some have raised that these proposed rules are a slam dunk for small businesses … it is simply false,” he said. The interchange changes could also limit consumer access to debit accounts, potentially pushing some individuals out of the banking system altogether. Credit Union National Association (CUNA) President/CEO Bill Cheney last week said that "the time window for action is relatively short," and urged credit unions and their members to take part in a "Call on Congress" campaign launched by CUNA and the leagues that will encourage legislators to "stop, study and start" over on interchange. Cheney has asked credit union backers nationwide to meet with their respective legislators in their home districts during the current district work period, which will run through April 29. Additional outreach and education efforts are being made through the leagues, individual credit unions, and social media outlets. To join these efforts, which include district-based letter writing campaigns, emails, and phone calls to legislators, use the resource link.
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