CUNA brings interchange message to Treasury
WASHINGTON (6/2/10)—Assistant U.S. Treasury Secretary for Financial Institutions Michael Barr listened to the Credit Union National Association (CUNA) delineate credit union concerns regarding pending interchange legislation, in a private meeting Monday.
During the meeting, CUNA President/CEO Dan Mica also hand-delivered a letter for U.S. Treasury Secretary Timothy Geithner urging him to protect credit unions from becoming collateral damage as a result of interchange provisions included in the Senate's regulatory restructuring legislation, which is pending consideration by a House and Senate Conference Committee.
The pending interchange amendment would require government intervention in what is now a free-market process—setting the rate of interchange fees merchants pay for the benefits associated with electronic payments.
In the meeting with Barr and letter to Geithner, Mica underscored to the Treasury that the interchange provisions are the "most serious threat" currently facing credit unions.
Mica, with senior CUNA staff, told the Treasury officials that CUNA believes the Sen. Richard Durbin (D-Ill), who drafted the interchange language, had and has no intention of harming credit unions. "Indeed he instructed his staff to try to work with the Illinois Credit Union League and CUNA to improve the legislation," Mica noted.
However, the CUNA chief added, "While we worked to the very last minute on this, we were not able to achieve sufficient improvements to make the language workable for credit unions."
"(W)e cannot sit by and let credit unions and their members suffer unintended consequences that will result in direct and substantial reductions in credit unions' net worth--at the very time every reasonable policy maker is encouraging financial institutions to maintain and build ample capital," Mica said.
CUNA also used the opportunity of the meeting and letter to thank Treasury for the Obama administration's efforts to support an increased member business lending (MBL) cap for credit unions, and for the department's work to help craft legislation to accomplish that objective.
In an important development last week, Treasury said it "could support proposals to increase credit union (MBL) provided safety and soundness concerns are addressed."
The department forwarded legislative language to Capitol Hill, which it had worked out with key credit union supporters in Congress, such as Sens. Mark Udall (D-Colo.) and Charles Schumer (D-N.Y.) and Rep. Paul Kanjorski (D-Pa.), as well as the National Credit Union Administration. CUNA also weighed in throughout the development of the provisions to push for the most advantageous language possible.
Use the resource link below to access CUNA interchange resource materials.
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