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News Now

Washington
Interchange rule delay gets Mich. House backing
LANSING, Mich. (2/11/11)--A resolution backing a delay in the implementation of the Federal Reserve’s proposed interchange regulations is awaiting action in the Michigan State Senate after the Michigan State House approved it on Thursday. The House Banking and Financial Services Committee unanimously approved the resolution earlier this week. The State Senate could act on the resolution as soon as Tuesday, Feb. 15. The resolution was backed by the Michigan Credit Union League and was introduced by Rep. Marty Knollenberg (R-Troy). League CEO David Adams said that the committee’s action was gratifying, and added that the league plans to seek similar action in the state Senate. The Credit Union National Association is working with the League to delay implementation of the Fed’s interchange provisions. The Fed's interchange provisions, which were released just before the end of 2010, could cap debit card interchange fees that are paid by merchants to card issuers at as little as seven cents per transaction. Issuers with under $10 billion in assets would be exempt from the interchange changes. The Fed proposal will remain open for public comment until Feb. 22. Fed officials during their December meeting said that the interchange provisions, if ultimately approved, would likely not become effective until after April. Credit Union National Association (CUNA) President/CEO Bill Cheney recently urged the Fed to stop and study the new Interchange law, rather than forging ahead with new rules, so that everybody wins -- consumers, merchants and financial institutions. Cheney said that the Fed should be given the time needed to consider all interchange related costs, and set a reasonable interchange rate to avoid "unintended consequences" such as the elimination of debit card programs by credit unions. Credit unions may also be forced to impose new fees on members’ debit accounts to keep their card programs afloat, Cheney added. Cheney has also challenged retailer claims that any savings gained from this interchange fee cap would be passed on to consumers.


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