CUNA and NAFCU have both written the Obama administration urging it to encourage the Federal Reserve to revise its proposed rule to regulate interchange fees so it is less onerous for credit unions.
NAFCU President/CEO Fred Becker urged President Obama to “weigh in on this important matter.’’ He added that, as written, the rule won’t help consumers and will “inevitably lead to job losses for America’s Main Street financial institutions.’’
Cheney repeated a request he had made in a letter to Federal Reserve Chairman Ben Bernanke that the Fed include “all allowable and reasonable costs,’’ when setting the cap on interchange fees.
He also supported having the Fed revise the proposal regarding the routing and exclusivity provisions that will undermine the exemption for small issuer
Becker wrote that the Fed’s proposed rule is a “recipe for disaster,’ and any government-imposed price caps should compensate debit card issuers for the cost of a transaction
Last Wednesday, the Senate rejected an amendment that would have delayed the implementation of the Fed’s rule regulating debit interchange fees by as much as a year.
The Fed’s rule is supposed to take effect on July 21. It issued a draft rule in December and was supposed to issue a final rule in May, but that has been delayed.
Acording 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.