(Note from Bill Prichard, Public Relations Manager: On May 14, CO-OP issued the statement below regarding the Durbin Interchange Amendment. We welcome your comments on this important industry issue. Please leave a comment via the icon at the bottom of the text).
On May 13 the “Durbin Interchange Amendment” (#3989) to S. 3217 (Restoring American Financial Stability Act) was passed by the U.S. Senate. The U.S. House of Representatives had previously passed a similar bill that does not contain an interchange amendment. The bills will go to a House/Senate conference committee to resolve differences. We hope through the conference committee process the interchange amendment can be deleted. We also hope that Rep. Barney Frank makes good on his promise to us at the CUNA Government Affairs Conference that there would not be interchange legislation this year.
Sen. Durbin’s amendment requires the Federal Reserve Board to regulate signature and PIN debit interchange for issuers and payment card networks with more than $10 billion in assets. That means most credit union cards will be unregulated. Normally we would view that as positive. In this case, however, it will likely make credit union-issued cards the most expensive cards for merchants to accept. This opens the door for merchants to exercise other provisions of the amendment to provide selective discounts, set transaction minimums and maximums, and provide discounts for other payment types. At the last minute, language was added to prohibit differentiation of discounts between issuers; however, the entire provision is unclear. Bottom line, the biggest winners will be the large merchants and the biggest losers will be consumers, many of which are your members.
We are further evaluating the amendment to assess its immediate and long-term impact. We cannot fully quantify the financial effect at this point.
At CO-OP, we will continue our efforts to support CUNA, Electronic Payments Coalition, Electronic Funds Transfer Association and other organizations in the opposition to this legislation. There is something you can do also. We encourage you to visit CUNA’s Web site at www.cuna.org and the sites of your state leagues to keep up with the issue and take the grassroots actions they recommend.
Working together, it is our goal to protect your interchange revenue stream and maintain a level playing field for credit unions in the payment card market.
I agree. We must band together to defeat this amendment. Regardless of the economic times, not one credit union can afford to absorb a cut in income as is estimated. Up to 75% – 90% loss of interchange income!!!
Continue pushing congress to hear our valid and logical concerns and throw this amendment in the trash.
Navy Federal Members: ACT NOW!
Stop the Durbin Interchange Amendment!
We need your help to defend Navy Federal’s ability to continue offering our debit and check cards – our CUCARD and Visa Check Card – as we know them today.
We need to STOP THE DURBIN INTERCHANGE AMENDMENT.
Congress is about to act on legislation that could have harmful consequences to you personally, all credit union members and all consumers in the U.S. If this law passes with the Durbin Interchange Amendment, free services like checking accounts, check cards and online bill pay could go away.
How did this happen? As part of the bill to reform risky practices in the banking industry, an unrelated amendment was added by the Senate (by Senator Durbin) in a late-night vote – with little debate and no hearing. If it becomes law, it will severely reduce the small fee (interchange) that merchants pay to card issuers like Navy Federal. This amendment was encouraged by lobbyists of the big merchants to pass their costs for taking debit and check cards on to the backs of consumers, like you and the members we serve.
Remember that credit unions like ours did not cause the financial crisis. Legislation to reform Wall Street should not end up harming not-for-profit credit unions like Navy Federal or you, the members we serve.
Now, the Senate and the House have to decide whether the Durbin Interchange Amendment should be part of the final financial reform bill. We need to tell them NO.
How Can You Help? It’s easy:
CALL your Representative and your Senators, and do it NOW. Discussion about the Durbin Interchange Amendment has already started.
You won’t actually speak to a Representative or Senator. You will either speak to a staff member, or you may get access to a voice mailbox. It’s best to call during working hours when you may speak to a staff member. In any case, no one will start a debate with you. The point is, let your voice be heard.
What should I tell them?
Tell them that you are a voter in their District (Representative) or State (Senator) and a member of Navy Federal Credit Union.
Tell them that you are opposed to the Durbin Interchange Amendment.
Thank them for passing on your opposition to the Durbin Interchange Amendment and letting your voice be heard.
If you’d like to make additional points:
Let them know that the Durbin Interchange Amendment threatens important services like free debit and check cards, free checking, and free bill pay – all services that Navy Federal members depend on.
Remind them that credit unions – especially credit unions like Navy Federal who serve the needs of the men and women who serve our country – didn’t cause the financial crisis and shouldn’t be harmed by legislation aimed at Wall Street and big banks.
Remind them that this amendment was rushed through, without proper discussion. The unintended, negative consequences for average American consumers were not considered.
Next Steps:
Finding the telephone numbers of your Representative and Senators is easy. Just type in your address and zip code at http://www.contactingthecongress.org.
Remember: It’s the number of callers that counts. Can you email? Not all Congressman count emails, so if you are unsure if yours does—don’t risk it, make the phone call.
CALL TODAY!
Thank You for Your Help and Support.