Cheney Cites Credit Union Concerns in Letter on Interchange (Misc News: January 3, 2011)
CUNA President and CEO Bill Cheney sent a letter on Dec. 3 to the ranking members of the House Financial Services Committee, Republican Spencer Bachus and Democrat Barney Frank, urging them to hold hearings on the implementation of the Interchange Amendment. Section 1075 of the Dodd-Frank Act proposes a two-tiered system for large and small card issuers, but the proposed Federal Reserve Board rules do not take advantage of explicit authority to write rules avoiding "evasion or circumvention" of the exemption.
According to Cheney:
"Since its introduction in the Senate, we have raised grave concerns that the Interchange Amendment lacked any enforcement mechanism for the small issuers’ exemption and that there is no guarantee the payment card networks will operate a two-tiered system the exemption necessitates for small issuers...Concerned that the exemption would not work as intended, and thus small issuers would be subject to the debit interchange fee structure developed for large issuers, we also expressed our concern that the Board would be arbitrarily limited to an incomplete set of costs when determining the debit interchange rate. We also raised concerns about the exclusivity and routing provisions that would require credit unions to join additional payment networks."
Read the full letter by clicking here.