NCUA Chairman Debbie Matz has told the Federal Reserve that for debit cards issued by federally insured credit unions with assets of $100 million or less, the interchange costs exceed the maximum allowed under the Fed’s proposed rule.
She said in a letter to Fed Chairman Ben Bernanke that because of this, the Fed should modify its proposed rule to “take into consideration the unique circumstances of smaller credit unions.’’
She told Bernanke that that the median cost per transaction was 31 cents per transaction for credit unions with assets of $10 million or less and is 19 cents per transaction for credit unions with assets between $50 million and $100 million.
And direct costs don’t fall below the proposed cap until credit unions reach the $100 million to $500 million asset range. According to NCUA data, the median cost for those credit unions is 8 cents per transaction.
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.
Matz also submitted a chart which showed that as of the call report data through the end of March, 181 federally insured credit unions had a net positive interchange income and 111 had a net negative interchange income.
The Fed has issued a draft rule but has been delayed in issuing a final rule because it is still reviewing the large number of comment letters it received on it. The new rule is supposed to take effect in July but there is legislation in the House and Senate that would delay the implementation date.