WASHINGTON (1/10/13)--A recent Federal Trade Commission (FTC) report on the impact of new laws capping interchange fee revenues presents an "incomplete and thus misleading view of the impact on credit unions," Credit Union National Association (CUNA) President/CEO Bill Cheney wrote in a letter to the agency.
The FTC's late 2012 report claimed that credit unions and other small issuers have been unharmed by new interchange laws.
Cheney in the letter sent this week noted that the 11-page FTC report includes only four paragraphs on the impact of debit interchange provisions on small banks and credit unions, and relies on "selective information" from Federal Reserve and Government Accountability Office (GAO) reports to reach its conclusions.
The report also fails to note that the full impact of the interchange cap regulations will not be known for some time. Routing and exclusivity provisions contained in the final interchange rule are also not discussed in the FTC report, Cheney added. CUNA recently made a similar point in an interview with The Washington Post.
The CUNA CEO also pointed out that the GAO report cited in the FTC document found that the average interchange fee received by credit unions and small banks declined by $0.02, or around 5%, after the interchange rule took effect. The GAO report also said that concerns remain about the potential for further interchange fee or fee income declines over the long term, Cheney emphasized.
The impact of an interchange fee cap is "a very important issue for credit unions and their members. Congress intended for credit unions and small banks to be exempt from the impact of the regulation of debit interchange fees, not just from the wording of key provisions of the rule. In order to ensure that outcome, it is imperative that agencies such as the FTC are as accurate as possible in reporting on debit interchange fees," Cheney wrote.
For the full letter to the FTC, and more on the Washington Post interview, use the resource links.