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Interchange Fees

Credit unions issue debit cards and credit cards to their members. Interchange revenue from the use of these cards is vital to credit unions to support the administrative expense of card programs. Interchange fees allow business costs, including operating expenses, fraud risk management, and the risk of consumer nonpayment, to be shared by the payments participants.

As part of the Dodd-Frank Act, Congress enacted provisions that regulate the debit interchange rates and give merchants more control over a consumer’s use of debit cards and credit cards at the point of sale and the route through which the transaction is processed.  Further complicating matters, the Dodd-Frank language prohibits the Federal Reserve from taking into consideration all of the costs of the payment system when regulating the debit interchange fee to establish a debit rate that is “reasonable and proportional” to the “incremental” cost of the individual transaction.

Legislation (H.R. 1081 / S. 575) has been introduced in both chambers of Congress to delay the Federal Reserve’s rule and study the impact of interchange fee regulation on consumers, merchants and financial institutions. CUNA supports both bills and encourages Congress to enact them as soon as possible.

Grassroots Action Requested

Please send messages to your federal legislators TODAY urging them to cosponsor S. 575 or H.R. 1081, and thanking those who have cosponsored the bills. Prewritten letters are available at the Credit Union Grassroots Action Center, where you can quickly personalize and send messages to the appropriate legislators based on the address you enter and each legislator’s cosponsorship status.

Sample House Letters
Sample Senate Letters
Sample Action Alert

Interchange Webstickers

Call on Congress Support Materials

Support Material

CUNA Talking Points, Letters and Testimony

1. Interchange Fees Talking Points
2. CUNA Letter in Support of Tester-Corker Amendment
3. Talking Points on the Routing and Exclusivity Provisions
4. Letter to Senators Tester and Corker regarding Michaels Data Breach and Debit Interchange Regulation
5. Letter to Senators Tester and Corker regarding Sony Data Breach and Interchange Fee Regulation
6. Michaels Data Breach
7. Straight to the Point (Interchange info sheet)
8. Coalition Letter of Support
9. CUNA Governmental Affairs Conference Presentation on the Fed’s Proposed Debit Interchange and Routing Regulations
10. Letter to House Members in Support of H.R. 1081 (3/16/2011)
11. Letter to Senators in Support of S. 575, the Debit Interchange Study Act (3/15/2011)
12. Letter to Federal Reserve Chairman Ben Bernanke Regarding the Proposed Debit Interchange Regulation (3/30/2011)
13. Letter to Federal Reserve Chairman Ben Bernanke Regarding the Proposed Debit Interchange Regulation (3/15/2011)
14. Testimony of Bill Cheney Before the House Financial Services Committee Subcommittee on Financial Institution and Consumer Credit Hearing on “The Effect of the Dodd-Frank Act on Small Financial Institutions and Small Businesses” (3/2/2011)
15. Testimony of Frank Michael, President and CEO of Allied Credit Union, on behalf of the Credit Union National Association, before the House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit Hearing on “Understanding the Federal Reserve’s Proposed Rule on Interchange Fees: Implications and Consequences of the Durbin Amendment” (2/17/2011)

Comment Letters from Members of Congress and Other Interested Parties

1. CUNA Comment Letter (12/17/2010)
2. Congressional Comment Letters Regarding Interchange
3. Outside Groups Comment Letters Regarding Interchange
4. Joint Trade Association Response to Merchant Payment Coalition Claims Regarding Debit Interchange Regulation

Other Support Material

1. Tester-Corker Amendment Language
2. Tester-Corker Amendment Memo
3. Key Findings of GAO's Interchange Report
4. S. 575 – Legislative Language, as Introduced
5. Dear Colleague Letter Supporting H.R. 1081 from Representatives Peters (D-OH), Renacci (R-OH), Perlmutter (D-CO), and LaTourette (R-OH)
6. Letter from Federal Reserve Chairman Ben Bernanke to Senate Banking Committee Chairman Tim Johnson and Ranking Member Richard Shelby Regarding the Debit Interchange Regulation (3/29/2011)
7. Letter from Federal Reserve Chairman Ben Bernanke to House Financial Services Committee Chairman Spencer Bachus and Ranking Member Barney Frank Regarding the Debit Interchange Regulation (3/29/2011)
8. Statement of Senator Richard Durbin regarding Interchange Fee Regulation (3/31/2011)
9. Statement of Senator Jon Tester regard Interchange Fee Regulation (3/31/2011)
10. Legislative Language, as Introduced
11. Understanding Fraud and Chargebacks