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Concern about interchange noted in more newspapers
MADISON, Wis. (6/16/10)--Credit unions' concerns about the interchange amendment in the Senate version of the regulatory reform bill are still making the rounds in a number of newspapers and their online sites, in letters to the editor, op-ed pieces, and in interviews. The amendment would allow government intervention in setting interchange fees. If the Federal Reserve set fees set too low--to favor the economy of scales of large banks-- debit card programs at smaller financial institutions would suffer, and consumers would end up paying more, say several newspaper sources. The Credit Union National Association and the nation's credit unions oppose the amendment so strongly that hundreds of credit union representatives blanketed Capitol Hill in Washington, D.C., last week to talk to legislators. And, nearly half a million contacts with congressional representatives were made by credit unions grassroots supporters delivering the message: "No interchange amendment." The amendment "really has the potential to damage credit unions, and debit and credit programs," Winter Prosapio, director of public affairs for the Texas Credit Union League, told the Fort Worth Business Press (June 14). If the Federal Reserve set fees too low, banks and credit unions will lose money and some small institutions may not be able to offer credit and debit card program, which hurts competitiveness, she told the newspaper. Pat Brown, CEO of $10 million asset NRCS FCU, Fort Worth, agreed that the amendment would be detrimental. "Our debit card program puts us in the red every month, so we don't make money on the debit card program. If they take the interchange fee away, we'll be that much further into the red, and I don't know that we'll be able to keep offering the program," Brown told the newspaper. In an op-ed article in the Asheville (N.C.) Citizen Times (June 12), Patty Idol, president/CEO of the $98 million asset, Waynesville, N.C.-based Mountain CU, noted that the amendment is a bad deal for consumers and unnecessarily interferes in the free market. "This amendment threatens to drastically change the way credit unions operate their debit card programs, and punish the very consumers the bill is trying to help," she wrote. Wisconsin Credit Union League President/CEO Brett Thompson, in a letter to the editor of the Milwaukee Journal-Sentinel (June 12), agreed with the newspaper's June 8th editorial that the financial reform bill includes many ideas to help consumers get a fairer shake. "However, there is one troubling provision that needs to come out: the Senate interchange amendment," he wrote. "Retailers want the convenience of taking these cards--immediate payment for their goods and no risk of fraud--without having to pay their fair share of the costs," Thompson wrote, noting that "consumers will be the ones who pay for this." "Bottom line: Consumers won't save any money at the store, but they will pay more to use their cards. The Senate interchange amendment must be dropped," Thompson added.
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