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Washington Archive

Washington

Inside Washington (06/04/2010)

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* WASHINGTON (6/7/10)—Changes to the Federal Reserve Board’s Regulation E, which implements the Electronic Fund Transfer Act, and Regulation DD, which implements the Truth in Savings Act, go into effect July 6, according to recent Federal Register documents. The Reg E final rule limits the ability of financial institutions to assess overdraft fees for paying automated teller machine (ATM) and one-time debit card transactions that overdraw a consumer's account, unless the consumer affirmatively consents, or opts in, to the institution's payment of overdrafts for those transactions. The Reg DD final rule addresses depository institutions' disclosure practices related to overdraft services, including balances disclosed to consumers through automated systems. Sec. 230.11(a)(1)(i) of the rule has a later, Oct. 1, effective date…

Mica seeks NCUA support on interchange

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WASHINGTON (6/7/10)--In a letter sent to National Credit Union Administration Chairman Debbie Matz late last week, Credit Union National Association (CUNA) President/CEO Dan Mica urged the NCUA to “help educate members of Congress” that Sen. Richard Durbin’s (D-Ill.) interchange fee legislation, if passed into law, would “significantly reduce net income” for credit unions that offer debit cards. “Credit unions offering debit cards represent nearly 70% of all credit unions, hold 97% of credit union assets and serve 96% of all credit union members. For these credit unions, there is no more important issue today than defeating the interchange amendment,” Mica added. Durbin’s amendment, which was added to the Senate’s version of financial regulatory reform legislation, would allow government intervention in setting interchange fees. The House version of financial regulatory reform legislation, which was passed late last year, has no interchange language, and both the House and Senate are currently working toward resolving differences between their respective versions of reform. CUNA, credit union leagues, and members and employees of credit unions large and small contacted congressional representatives to urge them to remove Durbin’s amendment from the regulatory reform package, and those efforts will continue this week with a national hike the hill. While retailers have argued that reducing interchange fee expenses would allow them to pass on savings to consumers, CUNA and various news organizations have recently noted that the proposed changes, which were backed by merchants, may in fact harm consumers. Specifically, CUNA has argued that the new interchange rules would allow merchants to herd consumers toward preferred forms of payment. To read Mica’s letter, use the resource link.

White House official CUNA meet on interchange

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WASHINGTON (6/7/10)—A key White House official met with the Credit Union National Association (CUNA) Friday to hear the credit union position on pending legislation that would allow the government to set interchange fees. CUNA adamantly opposes the adoption of the interchange provision in a final regulatory reform bill, which is currently being worked out as the House and Senate rectify their separate versions of reforms. In the meeting CUNA President/CEO Dan Mica emphasized that the interchange provisions are a most serious threat facing credit unions. He underscored the following points:
* The U.S. Congress has not thoroughly studied the impact of the interchange amendment; * The provision will affect small issuers disproportionately; and * Consumers will be the big losers by incurring new fees if the interchange provision becomes law.
The White House meeting occurred just three days after CUNA engaged in a similar session with Assistant U.S. Treasury Secretary for Financial Institutions Michael Barr. And both meetings occurred against a backdrop of an all-out grassroots effort by CUNA, the leagues and credit unions to convince federal lawmakers to stand in opposition to interchange language being included in a final regulatory reform bill. As of Friday, more than 200,000 had responded to CUNA’s call for grassroots interchange advocacy and made contact, via email and phone calls, on Capitol Hill on the issue. CUNA and the leagues are also sponsoring a national fly-in this week, asking credit union advocates to make personal visits with their lawmakers in Washington, D.C. on the issues involved.

CUNA takes to airwaves in interchange fight

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WASHINGTON (6/7/10)—With action on interchange fee legislation set to pick up even more this week, the Credit Union National Association (CUNA) will call on individual citizens in districts nationwide via a series of radio ads. The ad, which will be broadcast statewide in Arizona, Georgia, Iowa, Idaho, Rhode Island, South Dakota, Tennessee, and Vermont, as well as in Kansas City, Missouri, encourages consumers to “say no” to changing how fees are collected on your debit card. The ad provides a toll-free phone number that concerned individuals can use to reach their respective congressional offices.
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CUNA is also advocating for eliminating the interchange fee changes through a print ad campaign that will run in D.C.-based news media this week. CUNA has made the print campaign, which calls the new debit card use fees that would likely take the place of merchant-paid interchange fees “nothing more than a new tax on consumers,” available to credit union leagues nationwide as well. CUNA and other credit union representatives will take the anti-interchange fight to the halls of congress this week during a Hike the Hill on June 8 and 9, and CUNA President/CEO Dan Mica late last week encouraged the National Credit Union Administration to discuss the difficulties that interchange fee-less credit unions would face if the interchange legislation passes into law. (See related story: Mica seeks NCUA support on interchange) The interchange legislation, which would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions, was introduced into the Senate version of financial regulatory reform by Sen. Richard Durbin (D-Ill.) The House version of reform does not contain similar legislation. CUNA has recently said that this rule change forces the Fed into the role of a price-fixing body, when interchange fees should be driven by market forces.