As Congress returns this week from its Easter recess it was greeted with something familiar, letters from CUNA and NAFCU urging lawmakers to vote for a delay in implementing the Federal Reserve’s rule regulating interchange fees.
The rule is supposed to take effect in July though the central bank hasn’t released the final rule.
CUNA President/CEO Bill Cheney wrote senators that the recent PlayState data breach at Sony, in which the personal data of 77 million customers were compromised, showed the risks to credit unions and banks and the costs they must endure to replace credit and debit cards when a breach occurs.
Interchange fees help credit unions and banks pay for card security and the “capped rate [in the draft rule] would be significantly below the operational cost of providing debit program services,” Cheney wrote.
NAFCU President/CEO Fred Becker wrote that the lack of thorough study of the issue and its implications on credit unions make it imperative that senators vote to delay.
“Unfortunately, problems like this arise when a legislative solution is rushed without hearings or studies. Last minute hand-written changes on the Senate floor by the author of the amendment to gain votes last year are a clear demonstration of the rush to action on this issue,’’ he wrote. “This matter is urgent and should not be taken lightly.’’
Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.), have introduced legislation that would delay the implementation of the Fed’s rule by two years and order all financial regulators, including the NCUA, to study the issue. A bill to delay implementation by one year has been introduced in the House, by Reps. Shelley Moore Capito (R- W.Va.) and Debbie Wasserman Schultz (D-Fla.).
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.