Citing the provisions that would allow the Federal Reserve to regulate interchange fees, CUNA and NAFCU both expressed opposition to the regulatory restructuring bill that the Senate passed 59-39 last night.
Both groups vowed to lobby hard during the upcoming conference committee between the House and Senate to improve the interchange language, which was part of an amendment sponsored by Senate Majority Whip Richard Durbin (D-Ill.). There is no interchange language in the bill that the House passed last December.
CUNA President/CEO Dan Mica said the measure "continues to include language on interchange that credit unions find unacceptable." He added that CUNA worked with Durbin "in good faith" to make changes to the language, but no agreement could be reached.
NAFCU President/CEO Fred Becker noted that while his group has supported measures that would restrict the actions of the "bad actors," that caused the financial crisis, the presence of the interchange language makes the bill unacceptable.
"NAFCU will continue to work to eliminate any provision that would lead to a federal cap on interchange fees as this legislation moves forward," Becker said.
The amendment authorizes the Federal Reserve to ensure that debit card fees are "reasonable and proportional," in relation to processing costs. It excludes credit unions and community banks with assets of less than $10 billion. It also allows 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.
House and Senate conferees must resolve several differences, including one on the structure of the new entity to regulate consumer financial products. The House version has the entity as an independent agency while the Senate bill houses it in the Fed. Under both versions, credit unions with assets of $10 billion or less-all but three-would not be subject to examinations by the new regulator but must comply with its rules. Only Navy Federal FCU, Pentagon FCU and State Employees Credit Union would be subject to examination by the new regulator.