Senate Panels Considering Another Interchange Fee Cut
Credit unions have another interchange battle on their hands as a Senate panel is trying to limit interchange fees that the government can be charged.
Senate Majority Whip Richard Durbin, the main sponsor of the amendment giving the Federal Reserve the power to regulate debit interchange, has introduced an amendment to limit interchange rates on transactions with federal government entities at the lowest current market rate.
It was approved by a Senate Appropriations subcommittee on Tuesday and the full Appropriations Committee is scheduled to consider it tomorrow.
Durbin (D-Ill.) wants to reduce interchange fees across the board as he sees the current system as hurting merchants and consumers.
Lobbyists for CUNA and NAFCU said they were working at the grass roots to lobby Appropriations Committee members to vote against the amendment, which the trade groups say would cause additional revenue losses for credit unions.
A Treasury Department report released in June concluded that interchange and related card fees cost the government more than $116 million and it could save between 45 cents and 49 cents per transaction if the Treasury Department could negotiate for better rates.