Teachers' Union Supports Effort to Delay Interchange (Misc News: March 24, 2011)
The National Education Association is the latest group to come out against the Federal Reserve’s proposed interchange fee plan.
Teachers and education support professionals could be hurt by the Federal Reserve's proposed interchange fee cap, according to a national association that represents the country's educators.
The NEA said in a letter to key senators and representatives that the Fed rule "could have a significant negative impact on the cost of mainstream banking services to many middle and lower-income consumers,” including the group's constituents.
The letter was sent to Senate Majority Leader Harry Reid, D-Nev., Senate Minority Leader Mitch McConnell, R-Ky., House Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif.
The Fed's proposal would cap debit card interchange fees that are paid by merchants to large debit card issuers at no more than 12 cents per transaction. The rule would exempt issuers with less than $10 billion in assets, but many experts are concerned that the proposed exemption would not work as planned.
"Further study is warranted to determine if the proposed federal controls on interchange fees for debit swipes as currently mandated by the amendment will meaningfully benefit merchants and their customers, or if such controls will instead result in consumers paying higher prices for the banking services critical to their financial wellbeing," the letter added.
The NEA is a 3.2 million-member advocacy organization that represents current and retired teachers, faculty members, and other education support professionals. Other organizations, including the U.S. Hispanic Chamber of Commerce (USHCC), have also called for a delay in the implementation of the new interchange regulation.
Legislation that would delay the implementation of the interchange fee cap was introduced in the Senate and House on last week. The two bills would also order regulators to study the impact that the proposed interchange rules would have on credit unions, small issuers, consumers and merchants.
Click here to view the NEA letter.