Citing a potentially devastating impact on credit unions, both CUNA and NAFCU urged the Obama administration to endorse a delay in the implementation of the Federal Reserve’s rule regulating debit interchange fees.
“The proposed rule is a recipe for consolidation and also for higher fees for consumers,’’ NAFCU Executive Vice President Dan Berger wrote in a letter to Austin Goolsbee, chairman of the White House Council of Economic Advisers
Berger added that while merchants will have reduced costs. By contrast, for credit unions there will be “reduced income and increased costs are necessarily borne by the credit union’s members.”
NAFCU has also made its case through conversations with key administration members, including Elizabeth Warren, who is setting up the Bureau of Consumer Financial Protection.
CUNA has also discussed the issue with administration officials including Warren.
CUNA President/CEO Bill Cheney today wrote Federal reserve Chairman Ben Bernanke and urged him to support legislation to delay the implementation of the Fed’s rule.
“In light of all the concerns about the regulation of debit interchange fees, we firmly believe that a congressionally-mandated delay is not only reasonable but also necessary in order to ensure small issuers will not be harmed and consumers that rely on them will not be disadvantaged,” Cheney wrote.
The trade associations’ letters come a day after Bernanke told lawmakers that the Fed received so many letters about the proposed rule that it won’t meet the April 21 deadline for issuing a final rule.