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TV station offers CU perspective on interchange
MANKATO, Minn. (9/21/09)--Minnesota Valley FCU, Mankato, Minn., recently shared its perspective on interchange fees with a Minnesota Fox TV station. The U.S. House and Senate have bills in committee that could reduce the interchange fees charged to merchants. Getting rid of the credit fees would increase profit margins for businesses, said Nick Meyer, Minnesota Valley FCU president (Fox TV Sept. 17). “There have really been a number of years of history where merchants were trying to legislatively limit Visa, MasterCard, American Express and Discover as to how much interchange income they could get because that reduces their profits a little bit,” he told the station. “But abolishing fees for retailers could prompt the processing companies to look elsewhere to make up the difference, including consumers,” Meyer added. Consumer may not see the effects of the fees at the point of sale, but the costs will show up later at their financial institutions. For instance, free checking may not be as accessible at credit unions, Meyer said. Credit unions and small banks won’t want to make the changes, but since debit and credit cards barely break even right now, it may be necessary, he said. The Credit Union National Association has indicated it favors the current interchange fee structure. It said regulating the fees would adversely affect consumers, competition and innovation. The fees also help credit unions cover expenses and losses while giving merchants a guaranteed source of payment when the transaction occurs (News Now Aug. 10). To see the news story, use the link.
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