Reg Reform Bill Will Keep Interchange Provision (Monitor: June 28, 2010)
U.S. Sen. Richard Durbin’s amendment aimed at regulating interchange fees, which was added to the regulatory reform bill hotly debated in Congress since the beginning of the year, has been retained in the final version of the legislation.
The MCUL and CUNA have strongly opposed the interchange amendment since its inception, and will now oppose the regulatory reform bill as a whole due to the amendment's inclusion. Dan Mica, CUNA president/CEO, issued a letter (PDF) June 24 to all members of Congress explaining that credit unions oppose the enactment of the regulatory reform bill due to the interchange provision, and urging the lawmakers to vote “no” on the conference report.
According to CUNA, the most recent changes made to the legislation include a requirement that would force the Federal Reserve to account for fraud prevention costs when it determines interchange fees, an exemption for government pre-paid cards, and the removal of a provision that would have allowed merchants to discount between payment card networks. A provision that will force merchants that accept payment from one payment network to accept all debit cards that operate under that network was also added. (CUNA News Now, 6/28)
CUNA plans to focus on ensuring that the provision that exempts credit unions and other financial institutions with under $10 billion in assets from the interchange restrictions works under the Fed's rule. The Fed will be required to report on the impact that its interchange rules are having on credit unions and other small issuers in its yearly report to Congress.
A positive development for credit unions is the inclusion of the NCUA chairman on the proposed financial stability oversight council. The broader financial reform bill would also create a new Consumer Financial Protection Bureau within the Federal Reserve, which would not be responsible for examining credit unions with assets under $10 billion.
The House/Senate conference committee staff will release a final report this week. The final version of the bill will likely receive a vote by the House and Senate this week as well.