NAFCU President/CEO Fred Becker said he and his organization are "greatly disappointed," by the House's proposal on interchange fees that keeps most of the language in the Senate-passed amendment.
"We are greatly disappointed with this interchange proposal as it falls far short of safeguarding consumers' best interests. There is no language guaranteeing that any savings merchants realize will be passed on to consumers. Moreover, the carve-outs made for government-run programs underscore our concerns about the harmful impact of this legislation to all card users," he said. "In its current form, this legislation would still put credit unions at a severe disadvantage compared to large credit card issuers. That in turn, would hurt the 92 million Americans who rely on credit unions for debit and credit card services at reasonable rates with low fees."
The House proposal adds to the Senate language an exemption for government programs that use debit cards. It also exempts network fees from Fed regulation and gives the Fed leeway to adjust fees if banks or credit unions can make the case that they are needed to fund fraud prevention efforts.
The House's proposal is scheduled to be discussed at tomorrow's meeting of the House-Senate conference committee that is reconciling the House and Senate versions of the regulatory overhaul bill. There was language, giving the Federal Reserve the right to regulate interchange fees in the Senate-passed bill but the not the one passed by the House.
At tomorrow's session, conferees are also scheduled to discuss differences between the versions on the structure of the new entity that will regulate consumer financial products. House conferees are proposing that they maintain the Senate language, which houses the agency inside the Fed but gives it a separate budget and makes its director an appointee of the president. The House bill mandated that the new regulator would be an independent agency.
Credit unions with assets of $10 billion or less would have to comply with the rules issued by the new regulator but the examinations would be done by the NCUA. Only the three credit unions with assets of more than $10 billion-Navy FCU, Pentagon FCU and State Employees FCU, would be subject to examination by the new regulator.