Mica denounces interchange fee bill

WASHINGTON (5/16/08)—President/CEO Dan Mica of the Credit Union National Association (CUNA) Thursday said legislation that would impose government controls over credit card interchange fees is bad for consumers, business, and the economy.

Mica expressed credit union concerns as the House Judiciary Committee conducted a public hearing on the controversial bill, H.R. 5546, The Credit Card Fair Fee Act.

Earlier this week, CUNA made the same points in a full page letter in a Capitol Hill journal. Joining with other financial services groups, CUNA urged members of Congress to reject the legislation.

"CUNA opposes the bill because it would inject government controls into the market in the midst of economic uncertainty, and adversely affect consumers," Mica said in the statement.

"Consumers stand to lose the most if it becomes law," he added. "No one expects merchants to lower their prices because the government-controlled interchange rate is less. And financial institutions will have to find ways to cover the cost of the payment system."

Mica said the overall result is that controls would make convenient credit more expensive for consumers, and in some cases--less available.

He said the interchange regulatory bill imposes unnecessary regulation over the card transaction interchange fee process by establishing an expensive government tribunal to enforce it.

Mica said the system is more appropriately regulated by the market, and that government interference will harm all participants.