We Cannot Relent in Opposing Interchange Cap
Since its introduction last year as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the interchange price cap amendment has been a source of great consternation for our industry. NAFCU, both in principle and substance, has fought it fervently.
We stood at the forefront in recognizing that any measure that would split credit unions by asset size is dangerous to our industry. That is why we adamantly opposed the application of the Consumer Financial Protection Bureau to credit unions with over $10 billion in assets. Today, we see the first repercussions of a presumed exemption of credit unions below $10 billion in assets from the interchange price cap, a "protection" that simply is not possible in the marketplace and could very well imperil the competitive landscape of our industry.
Perhaps the most helpful voice on this matter was that of Federal Reserve Board Chairman Ben Bernanke, who offered his opinion before the Senate Banking Committee. His recognized that the interchange fee carve-out for smaller institutions will likely not work and that it is very much an open question as to whether consumers will experience reduced costs from retailers.
Despite all the misleading pro-consumer propaganda, many are now realizing the unrealistic nature of consumer claims when all factors point to the debit card interchange fee cap actually raising fees and limiting availability of reasonably priced services and products to consumers.