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Cheney YouTube video urges interchange delay action
WASHINGTON (6/6/11)--A new YouTube video posted by Credit Union National Association (CUNA) President/CEO Bill Cheney points to the massive data breach at Michaels stores as a prime example of why credit union members should urge Congress to delay the pending debit card interchange rules. Otherwise, Cheney said, credit unions will be left “holding the bag” when these breaches occur. Michaels, a nationwide big-box craft store, last month notified customers of data breaches that occurred throughout the country. Following these types of breaches, all merchants must do is notify affected customers. Credit unions and other financial institutions are ultimately required to gather additional information on the breach, reissue cards, cover transaction costs, refund funds to victims of fraud, and among other things, Cheney noted. Cheney also noted that while customers will likely have their debit cards reissued, at no cost, as a result, credit unions and other financial institutions, and not the retailer, will pay for the new cards. The Federal Reserve Board's proposed interchange regulations could limit debit card transaction fees to as little as seven to 12 cents per transaction. A proposed exemption for issuers with under $10 billion in assets is included in the proposal, but CUNA, leagues and credit unions have been emphasizing that the exemption is flawed and will not work in practice. Sens. Jon Tester (D-Mont.) and Bob Corker's (R-Tenn.) S. 575 would delay implementation of the debit interchange provisions by 15 months. A study of their impact on consumers, credit unions and other financial institutions, and merchants would also be ordered. Similar legislation has been offered in the House, but House members have said that they would wait for the Senate to act first on the interchange issue, since that legislation was first offered in the Senate. National Journal on Friday reported that a vote on this bill could come up for a vote in the U.S. Senate this week. Sixty votes are needed to approve the delay. CUNA, the leagues, and credit unions have been active ahead of a potential vote, with over 200,000 of them reaching out to email their legislators through CUNA's CapWiz program.
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