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News Now

Washington
With interchange CUs oppose fin reg reform bill
WASHINGTON (6/24/10)--Saying that debit interchange provisions “would not only adversely affect how credit unions provide access to members’ accounts,” but would also “increase costs to credit union members,” Credit Union National Association (CUNA) President/CEO Dan Mica and affiliated credit unions urged legislators to vote no on the current financial regulatory reform package. CUNA’s executive committee on Wednesday also agreed that CUNA and credit unions should oppose the regulatory legislation as long as the interchange language was included. If the interchange provisions were not part of the bill, CUNA would not oppose H.R. 4173, the Restoring American Financial Stability Act of 2010, Mica added. The interchange changes, which were agreed to by both branches of the legislature on Tuesday, would allow the federal government to impose controls on the fees paid to use electronic payment networks. Mica said that while the increased consumer costs that the interchange changes would represent are not what proponents of H.R. 4173 originally intended, those costs “will be the reality for consumers unless the debit interchange provision is removed or modified significantly.” CUNA and credit union leagues are encouraging their member credit unions to write, call and request meetings with lawmakers in their home districts both over the coming weekend and in the near future to discuss the interchange provisions and the legislation in general. In a letter to Congress, Mica said that credit unions did not cause the financial meltdown and have “worked with Congress over the last year in an attempt to minimize the adverse impact that this legislation will have on credit unions and their members, while at the same time recognizing that consumers of financial products, especially those provided by currently unregulated entities, need greater protection.” That letter also reiterated CUNA’s previous claims that the under $10 billion of assets carveout, while well intentioned, “will not work” because there is no mechanism in the legislation that requires payment card networks to operate a two-tier interchange rate system. “Because of this, we believe the interchange rate received by credit unions would converge on the large-institution rate,” the letter adds. For the full letter, use the resource link.


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