NCUA Supports Financial Reform Legislation
Despite the cap on debit card interchange it contains, a June 29 letter to Rep. Barney Frank (D. Mass) from NCUA Board Chairman Debbie Matz made it clear where the agency comes down on the financial reform package.
Matz wrote the Chairman of the House Committee on Financial Services to praise the bill's addition of parity between banks and credit unions on insurance on interest bearing business accounts. She also praised the bill for the Financial Stability Oversight Council, the group of financial regulators that is supposed to check for systemic risk, and for the Bureau of Consumer Financial Protection which will be charged with regulating consumer financial products.
A majority of credit unions oppose the bill because it mandates the Federal Reserve to put a cap on debit card interchange. Bill supporters say small financial institutions like most credit unions will be able to retain a higher debit interchange rate, but credit unions doubt that the market will support such a dual track interchange system.
"While we understand the reasoning behind Chairman Matz's endorsement of the Dodd-Frank bill, we strongly believe that this bill will create additional, costly burdens on credit unions as well as creating price control caps on interchange,: NAFCU CEO Fred Becker said. "And this is all done when credit unions can least afford it."