CUNA Continues Interchange Fight with Fed, in Courts (Misc News: June 14, 2011)
Following last week's bitter defeat in the U.S. Senate, CUNA has turned its attention to pushing the Federal Reserve to craft a final rule that will minimize the impact on small issuers including credit unions.
On Monday, CUNA President/CEO Bill Cheney called on U.S. Treasury Secretary Tim Geithner "to help pursue solutions that will help small issuers without undermining the interchange statute," CUNA News Now reported.
And, while it pursues favorable regulations from the Fed, CUNA also continues to support TCF Bank's lawsuit seeking to have the interchange rule found unconstitutional.
Cheney's letter to Geithner asks the treasury secretary to discuss ways to protect credit unions and other small issuers with Fed chairman Ben Bernanke and suggests ways to achieve that goal.
- Requiring card networks to report to the Fed once a two-tiered debit interchange fee structure has been established;
- Requiring ongoing updates of the status of the two-tiered fee system. These updates could be reported to Congress;
- Ensuring that the Fed accounts for all allowable and reasonable costs when it sets the interchange fee rate cap; and
- Exempting small issuers from routing and exclusivity provisions, or delaying implementation of those provisions for a minimum of 24 months.
"Congress provided that the Fed consider interchange costs for large issuers, but directed that debit card interchange income to small issuers be protected. That is unquestionably the outcome that Congress intended when it approved the exemption for small issuers as part of the interchange law," Cheney said in the letter Geithner. Click here to read the letter.
Legislation to delay the interchange implementation was defeated in the Senate last week, but Cheney said the 54 to 45 vote count - 60 votes were needed to overcome a filibuster by Sen. Dick Durbin, D-Ill. - still shows that senators are skeptical over whether or not the interchange plan would work as intended. Cheney said that credit unions can use the support of these senators "as a tool" to help improve the interchange implementation rule being drafted by the Fed.
No issue is more significant to the credit union system now than a favorable resolution regarding debit card interchange fees, and Credit Union National Association (CUNA) President/CEO Bill Cheney has urged U.S. Treasury Secretary Tim Geithner "to help pursue solutions that will help small issuers without undermining the interchange statute."
CUNA also continues to remain active in the TCF litigation that challenges the interchange provisions. Oral arguments are set for Thursday, June 16.