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News Now

Washington
Retailers feel CU heat on interchange Cheney
WASHINGTON (5/19/11)--Retailers “are feeling the heat” from credit unions and others urging a delay of a statutory cap on debit card interchange fees, said Credit Union National Association (CUNA) President/CEO Bill Cheney, which is clear by their pledge announced yesterday to escalate their fight over the next 60 days. The National Retail Federation announced Wednesday that it soon will launch a nationwide 60-day grassroots, media and lobbying barrage--complete with hundreds of thousands of dollars in radio ads and Capitol Hill visits in June--to fight efforts to delay implementation of the cap in favor of further study. Without legislation to push back the effective date, the cap is set to go into effect July 21. Cheney said in response to the retailers’ plans that it is no surprise the merchants are fighting back, but credit unions will continue fighting as well: “Since March 15, credit unions have generated at least 325,000 direct contacts with members of Congress in support of bills by Sen. Jon Tester (D-Mont.) and Rep. Shelley Moore Capito (R-W.Va.) to delay and study the law and proposed rules. Congress is listening to credit unions.” At issue is a plan by the Federal Reserve Board to implement the Dodd-Frank Wall Street Reform Act cap on debit and interchange fees at seven to 12 cents per transaction. “Credit unions acknowledge that there should be sensible reform of interchange fees--but what is in the law now is not sensible at all,” Cheney said. The Federal Reserve Board’s proposal carries no enforcement mechanism to ensure a small issuer exemption works and, therefore, credit unions and small community banks will be affected by the regulation in a manner that Congress did not intend, the CUNA leader underscored. “Congress needs to stop, study and start over on the interchange rule,” he said.


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