Frank again emphasizes interchange exemption

WASHINGTON (7/2/10)--Speaking before the House following the passage of financial regulatory reform legislation on Wednesday, Rep. Barney Frank (D-Mass.) repeated earlier assurances that credit unions and other small institutions would be exempted from the terms of recently added interchange fee legislation.

Language in the interchange amendment would ensure that credit unions with under $10 billion in assets were held exempt from the Fed interchange changes. The interchange fee amendment, which was offered by Sen. Richard Durbin (D-Ill.) and ultimately agreed to by the recently completed regulatory reform conference committee, would allow the Federal Reserve to intervene in the setting of those fees.

In his remarks, Frank said that credit unions and other small issuers would also continue to be permitted to issue their debit cards without any market penalties.

Frank earlier this week expressed similar sentiments in a letter to his colleagues. Following that release, the Credit Union National Association (CUNA) said that Frank's memo and more recent comments serve as excellent notice of the Congress's strong intent to exempt credit unions and community banks from the reaches of the provision that requires the Fed to set interchange fees.

Mica said the memo gives the Fed strong guidance to follow in the event that the provision is enacted and the Fed is called upon to implement it.

The regulatory reform package passed the House 237 to 182 on Wednesday, and it is not known when the Senate will take up the legislation. The Senate on Thursday was essentially closed for business in observance of Sen. Robert Byrd (D-W.Va.), who died earlier this week.

CUNA continues to urge legislators to oppose the bill unless the interchange changes are removed from the final version of the bill.

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