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New interchange issue creeps into subcommittee appropriations bill

WASHIINGTON (7/29/10)--Sen. Susan Collins (R-Maine) today may offer an amendment to an appropriations bill with an interchange provision in an effort to mitigate the impact of the provision on credit unions and community banks.

Collins expressed concern for credit unions earlier this week as the ranking Republican member of the Senate subcommittee that approved a funding package, which included a ban on payment card networks charging the federal government a credit card interchange rate higher than the lowest interchange rate available on the market.

Collins noted at that time her intention to offer a substitute" amendment when the full Senate Appropriations Committee considers the measure today, and the Credit Union National Association (CUNA) is asking credit unions to contact members of the committee to express concern about further interchange regulation.

"This legislation has a long path before enactment--and there is significant time to affect this legislative language. Nevertheless, we will not take this threat lightly and will work with Sen. Collins and other senators who have concerns about interchange regulation," CUNA Senior Vice President of Legislative Affairs John Magill said Wednesday.

The subcommittee, which added the interchange language to the funding bill, is chaired by Sen. Richard Durbin (D-Ill.), who drove the successful push to include government limits on interchange fees in the comprehensive financial services regulatory reform bill signed into law June 21.

Prior to a final vote in Congress, CUNA called for credit union grassroots action against the government controls, which resulted in hundreds of credit union advocates making personal visit to lawmakers on Capitol Hill. CUNA's call to action also spurred in excess of 600,000 emails and phone calls to lawmakers, urging their opposition to the interchange provision. The final law includes an exemption from the interchange limits that should cover all but the three largest credit unions.

CUNA continues to advocate for credit unions on interchange by working closely with the Federal Reserve as that agency works to implement the new rules affecting debit card interchange fees.

Also of interest to credit unions in the bill before the Appropriations Committee today are provisions that would set funding for the U.S. Treasury Department Community Development Financial Institutions (CDFI) Fund, and the National Credit Union Administration's Community Development Revolving Loan Fund (CDRLF), and Central Liquidity Facility.

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