Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Rep. Frank shares interchange concerns for CUs
WASHINGTON (12/21/10)--The implementation of still-pending interchange regulations, if not properly crafted, “may have unintended consequences” for credit unions and consumers, Rep. Barney Frank (D-Mass.) recently said in a letter to the Federal Reserve. Limitations on network restrictions, which the legislation has promoted for inclusion under the regulations, should not unduly increase costs for credit unions, community banks or government card programs, Frank added. He also urged the Fed to “ensure that any entity offering debit transaction routing services maintains strong consumer protections, including privacy, data security and fraud protections.” The Credit Union National Association (CUNA) also expressed its concerns to the Fed last week, with President/CEO Bill Cheney saying that the loss of interchange fee income for small issuers and the costs of having to belong to more payment networks will have a "horrendous impact" on credit unions that offer debit cards, as well as their ability to build net worth. The Fed proposal, which was released last Thursday, would cap debit card interchange fees that are paid by merchants to card issuers at 12 cents per transaction. Issuers with under $10 billion in assets would be exempt from the interchange changes. However, Cheney expressed skepticism at the effectiveness of the $10 billion exemption cap, noting that there is nothing in the Fed’s proposal that creates an enforcement mechanism to protect small issuers. The Fed has left its proposal open for public comment until Feb. 22, and CUNA continues to develop a more comprehensive comment letter.


RSS print
News Now LiveWire
Goodwill Industries latest to report data security breach http://t.co/gIaXNsT4Bk
13 hours ago
CUNA economist Schenk discusses regulators' focus on interest-rate risk. See CU Magazine: http://t.co/tW1p9rTSSv
15 hours ago
Fed issues annual report on general-use prepaid cards in gov't-administered payment programs. http://t.co/3zPhejSPZt
15 hours ago
Children in foster care face higher risk of identity theft via @NBCNews http://t.co/Dif0hCfBdA
15 hours ago
.@Cornerstone_CUL's leadership conference includes food drive for San Antonio food bank http://t.co/h2O8O4TxuD
16 hours ago