WASHINGTON (5/24/13)--While a new Federal Reserve survey claims the interchange fee cap exemption is working for small issuers, details about credit unions' experience in this area are not fully reflected and the Credit Union National Association is talking with the agency to find out more about the survey results, CUNA President/CEO Bill Cheney said Thursday.
CUNA continues to closely monitor the impact of the interchange cap and whether market forces appear to drive down the fees that the exemption for smaller institutions is intended to protect.
"These results are welcome in the short term for credit unions across the country, but we continue to have grave concerns about debit interchange income for credit unions over the longer term, and question whether these results will stand over time," Cheney said.
The information was gathered from survey responses from the payment card networks and 102 small depository institutions. CUNA has reached out to the Fed to clarify how many of these respondents were credit unions, since the number is not apparent from the information released. The Fed had asked 1,000 small financial institutions to take part in the survey.
The Fed's final rule implementing the interchange law capped large issuer debit interchange fees at 21 cents. An additional five basis points per transaction may be charged to cover fraud losses, and an extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards. Most credit unions are exempt from the fee cap.
Information on network exclusivity provisions and compliance costs is also included in the Fed report.
For the full Fed release, use the resource link.