Cheney: CUs Have Made Interchange 'Radioactive' on Capitol Hill (Monitor: May 31, 2011)
CUNA President/CEO Bill Cheney is calling on the credit union community to ratchet up efforts even further on the debit interchange issue.
In a conference call with boards and leagues, Cheney said interchange is the most hotly debated issue on Capitol Hill right now, largely because of efforts by credit unions.
While CUNA is pursuing legal and regulatory solutions as well, Cheney asked credit unions to keep up and even increase the pressure they are putting on their U.S. senators.
“We have made this radioactive on Capitol Hill,” Cheney said. “We have the momentum to impact this law.”
Cheney thanked Sen. Jon Tester, the Montana Democrat who is sponsoring a bill calling for a 15-month delay so the issue can be properly studied.
“It’s not easy to stand up against someone like (Sen.) Dick Durbin,” Cheney said.
While CUNA continues to pursue a legislative solution, it is also closely following the legal challenge filed by TCF Bank. CUNA has also been talking to the Federal Reserve about restructuring its rule enforcing the Durbin Amendment, which calls for debit interchange or swipe fees to be “reasonable and proportional.”
Cheney said CUNA officials often ask Fed rules makers when its updated rule will be released and they always seem to say “two weeks.” The final rule was supposed to be released by April 21, but Fed Chairman Ben Bernanke said the volume of comments on its proposed rule made it push back the date when it released the final version.
“Every day they delay their rule makes our case better,” Cheney said. He added that the delay shows that the Fed is coming up with a workable solution.
He also said that while some senators have refused to commit to supporting Tester’s bill to delay interchange, many are pressuring the Fed to come up with a better rule than first proposed.
Congress will be in recess next week and Cheney asked credit union supporters to do what they can to influence their senators while they are in town. He suggested visiting the senators’ Facebook pages to see what events they will attend while back home.
Michigan’s two Democratic senators, Carl Levin and Debbie Stabenow, have not offered a position on debit interchange. Visit Levin’s Facebook page and Stabenow’s Facebook page to leave a comment.
“Every time they turn around, someone from a credit union should be there to talk about interchange,” Cheney said.
Also, Cheney asked that credit unions continue to encourage their members to send letters to their representatives and senators telling them they want interchange delayed.
Click here to visit the MCUL’s Grassroots Action Center, where you can find links to send letters to your senators and representative. Click here to read Cheney's letter on the specifics of how you can help the cause.
The MCUL also has a consumer-facing website, SaveMyFreeChecking.com, aimed at getting consumers to help fight the interchange rule. Credit unions are invited to promote the site on their pages. In addition, CUNA has a toll-free number – (877) 422-3525 – available for people to make comments. Cheney said the association has been somewhat surprised by the lack of calls, although the volume of electronic notes has been strong.
Those contacts are critical now because the merchants have increased their pressure on Washington to allow interchange to take effect as planned.
As CUNA has said repeatedly, the battle over interchange is in the Senate, where Durbin, D-Ill., is a power player. Durbin is mounting a vigorous fight over the measure and has promised a filibuster if it comes to the floor, meaning supporters of a delay need 60 votes to pass the measure.
The proposed Fed rule would cap interchange fees at a maximum of 12 cents per transaction. It currently averages 44 cents. Credit unions, as well as banks, say that the Fed underestimated the cost of interchange because they did not take into account issues such as debit card fraud.