ADVISORY

Opposition to HR 5546, the Credit Card Fair Fee Act

April 30, 2008

FOR IMMEDIATE RELEASE
Contact: Patrick Keefe -- (202) 508-6765
pkeefe@cuna.com

Reflecting its newly adopted policy opposing regulation of interchange fees, CUNA Tuesday sent to each House member a letter outlining the association’s opposition to HR 5546, the Credit Card Fair Fee Act, which would establish a tribunal to regulate interchange fees.

In adopting its policy on interchange fees, CUNA noted that government interference and regulation of the fees would "adversely affect consumer options, competition, and technological innovation." CUNA also noted that "discussions regarding what value should be placed on the use of electronic payments should be within the purview of the industry participants," including consumers.

In its letter to House members, CUNA stated HR 5546 would impose "unnecessary regulation over the card transaction interchange fee process by establishing a costly governmental tribunal that would be authorized to impose its decisions on a system that is more appropriately governed by the market."

The association added that "government-imposed price controls on interchange fees are more likely to increase credit and debit cards costs that consumers bear."

The complete text of CUNA’s letter to House members follows:

April 29, 2008
Members of the United States House of Representatives
Washington, DC 20515

Dear Representative:

On behalf of the Credit Union National Association (CUNA), I am writing to express our opposition to H.R. 5546, the "Credit Card Fair Fee Act."

CUNA is the nation’s largest credit union advocacy organization, representing 90% of our nation’s approximately 8,400 state and federal credit unions, their state credit union leagues, and their 90 million members.

H.R. 5546 would impose unnecessary regulation over the card transaction interchange fee process by establishing a costly governmental tribunal that would be authorized to impose its decisions on a system that is more appropriately governed by the market. Government interference in this working market stands to harm all participants, including consumers, merchants and financial institutions.

Supporters of this legislation assert that consumers would benefit from government interference, but there is no clear indication that this objective will be met. Government-imposed price controls on interchange fees are more likely to increase credit and debit cards costs that consumers bear. The uncertainty surrounding this legislation makes it unlikely that consumers will see any benefit.

We urge you to oppose the legislation.

Sincerely,

Daniel A. Mica

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About CUNA
With its network of affiliated state credit union leagues, Credit Union National Association (CUNA) serves about 90 percent of America's 8,500 credit unions, which are owned by more than 90 million consumer members. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life. For more information, visit www.cuna.org.

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