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Key senators reminded of fraud cost to card issuers
WASHINGTON (5/20/11)--Credit Union National Association (CUNA) President/CEO Bill Cheney in a letter to senators in the 20 states impacted by a recent Michaels craft store data breach reminded the legislators that credit unions’ ability to help their members cope with the aftermath of these crimes would be hindered if interchange fee cap regulations become law later this year. “If constituents affected by these or other breaches contact your office, we hope you will encourage them to contact their card-issuing credit union for assistance,” Cheney said. While credit unions will work with their members “to investigate, reissue the debit card, and block future suspicious transactions,” Cheney added that the merchant responsible for the breach will not assist them. “Credit unions are able to provide these member services because of the interchange fees that merchants pay to participate in the payment system,” Cheney said. The proposed interchange regulations would limit debit card swipe fees to as little as 12 cents per transaction. While a proposed exemption for issuers with under $10 billion in assets is included in the proposal, Cheney noted that regulators, including Federal Reserve Chairman Ben Bernanke, are unsure whether this exemption would work in practice. The letter was sent to senators in Colorado, Delaware, Georgia, Iowa, Massachusetts, Maryland, North Carolina, New Hampshire, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Virginia, and Washington State. A letter was also sent to Sen. Mark Kirk (R) of Illinois. For the full letter, use the resource link.


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