On-Site Coverage: Bachus Urges CUs to Lobby on Interchange Rule Change
WASHINGTON — House Financial Services Committee Chairman Spencer Bachus urged credit union advocates to lobby members of Congress, especially in the Senate, to lessen the impact of the Federal Reserve's proposal on debit interchange.
“People want to know the person who is making them a loan,” Bachus (R-Ala.) said during a speech at CUNA’s Governmental Affairs Conference. “If we don’t get it [debit interchange] right, that credit union or community bank in your town isn’t going to be there and you will be left with larger institutions.”
He didn’t say what, if anything, the House might do to try to slow down the Federal Reserve’s issuing of a new rule that would limit debit interchange fees. The Fed has issued a proposed rule, as required by the financial overhaul bill that Congress passed last year.
According to the proposed rule, the allowable costs for interchange would be limited to no more than the issuer's allowable costs divided by the number of electronic debit transactions on which the issuer received or charged an interchange transaction fee in the calendar year. Or the issuer could receive debit interchange capped at 12 cents per transaction.
He also criticized President Obama for not having nominated a director of the new Bureau of Consumer Financial Protection, and said it is unfair that the agency has already hired many key personnel and begun planning for its launch this summer without having a permanent director. Obama has named Elizabeth Warren to help set up the agency but he hasn’t nominated her or anyone else as the head.
Bachus also said Congress would address the problems in the housing finance system and reiterated his belief that there should be a shift in the backing of mortgages from the government to the private sector.