Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Cheney to Treasury Aid CU interchange solution search
WASHINGTON (6/13/11)—No issue is more significant to the credit union system now than a favorable resolution regarding debit card interchange fees, and Credit Union National Association (CUNA) President/CEO Bill Cheney has urged U.S. Treasury Secretary Tim Geithner “to help pursue solutions that will help small issuers without undermining the interchange statute.” Cheney in a letter to Geithner asked the Treasury Secretary to discuss ways to protect credit unions and other small issuers with Federal Reserve Chairman Ben Bernanke, and suggested several ways that the Fed could achieve that goal. Among Cheney’s suggestions are:
*Requiring card networks to report to the Fed once a two-tiered debit interchange fee structure has been established; *Requiring ongoing updates of the status of the two-tiered fee system. These updates could be reported to Congress; *Ensuring that the Fed accounts for all allowable and reasonable costs when it sets the interchange fee rate cap; and *Exempting small issuers from routing and exclusivity provisions, or delaying implementation of those provisions for a minimum of 24 months.
Cheney said that the issue is simple: “Congress provided that the Fed consider interchange costs for large issuers, but directed that debit card interchange income to small issuers be protected. That is unquestionably the outcome that Congress intended when it approved the exemption for small issuers as part of the interchange law.” While interchange implementation delay legislation was narrowly defeated in the Senate last week, Cheney said that the 54 to 45 vote count still shows that senators are skeptical over whether or not the interchange plan would work as intended. Cheney said that credit unions can use the support of these senators “as a tool” to help improve the interchange implementation rule being drafted by the Fed. CUNA is pressing the Fed to help minimize negative effects on credit unions and their members, and also remains active in the courts, joining TCF Financial in litigation that challenges the interchange provisions. (See related story: TCF/Fed oral arguments set for June 16) For the full letter to the Treasury, use the resource link.

RSS print
News Now LiveWire
@CFPB today finalized a rule to promote more effective privacy disclosures from financial institutions to their customers. Watch News Now
14 minutes ago
Four consumer rights you didn't have 40 years ago via @CreditExperts
32 minutes ago
Cascade Community #CreditUnion has granted 30 educators almost $6,000 in Chalkboard grants for the 2014-15 school year.
54 minutes ago
#NewsNow Money: CUNA's Schenk talks interest rates, inflation
59 minutes ago
Eric Richard, CUNA's general counsel, details legal/regulatory trends affecting CUs at CUNA Attorneys Conf. today.
2 hours ago