Senate May Vote on Interchange Today
Senators could vote as early as today on an amendment aimed at regulating interchange fees as part of a bill to revamp the way financial services are regulated.
Senate Majority Whip Richard Durbin (D-Ill.) is sponsoring a measure that would authorize the Federal Reserve to ensure that debit card fees are "reasonable and proportional," in relation to processing costs. It would exclude credit unions and community banks with assets of less than $1 billion.
It would also allow merchants to set a minimum or maximum amount for each transaction and let them offer additional discounts for using a certain type of card or cash.
Durbin is framing the issue as helping small businesses and consumers.
"American businesses and consumers are getting nickled and dimed by the big banks, who end up making billions from these hidden fees," he said on the Senate floor earlier this week.
CUNA and NAFCU are strongly opposed to the amendment and both say even the exemption for credit unions and small banks is problematic.
"What has been labeled a carve out is in, fact, a double-edged sword: by directing the Federal Reserve to regulate only the debit interchange of big banks, the amendment makes our institutions' debit cards the most expensive for a merchant to accept-something the market will not tolerate for long," CUNA President/CEO Dan Mica and Independent Community Bankers of America President/CEO wrote senators.
NAFCU Executive Vice President for Government Affairs B. Dan Berger wrote that the amendment "will allow merchants and retailers to discriminate against your credit union constituents.''
To emphasize his point, Berger underscored the following paragraph: "Quite simply, this amendment would hurt credit unions and their 92 million members, and we ask you to oppose it. This is a key vote for your credit union constituency."