Try this simple bit of arithmetic to see how much the Durbin interchange amendment to the financial regulatory overhaul bill will hurt your credit union:
$30 x the number of debit cards you issue
So, if there are 10,000 active debit cards out there with your credit union’s name on them, you will lose somewhere in the neighborhood of $300,000 in interchange income each year if the Durbin amendment isn’t stricken from this bill.
We at CO-OP certainly are. In fact, we’ve pledged $75,000 to CUNA to help them mount one of the biggest grassroots efforts since The Credit Union Membership Access Act of 1998, or H.R. 1151.
That bill could have paralyzed credit unions, and the Durbin amendment has the potential to do some major harm, too. It won’t just hurt your credit union, though. Consumers are likely to be the biggest losers if interchange is regulated in the way that Durbin intends:
- Merchants are likely to place multiple restrictions on their acceptance of debit cards, taking away the choices that consumers currently enjoy.
- If credit unions decide to accept lower interchange rates so that their cards are accepted, many of them will need to assess fees on debit card transactions in order to cover their costs.
- Merchants have not promised to pass the savings on to consumers. They’ve actually said that they would offer other benefits “like free gift wrapping,” according to the head of the National Retail Federation.
What can you do?
- Write a letter: CUNA–Take Action
- Get your members to write letters: Some credit unions have seen as many as 10 percent of their members heed their call to action.
- Hike the Hill: Join CUNA on June 9 in Washington, DC. See: CUNA-Hike-the-Hill
Finally, to learn more, visit the following Web sites:
Electronic Payments Coalition: EPC Facts on Interchange
CUNA: CUNA Interchange FAQs