Interchange Cap Could Cost BECU $45M: Onsite Coverage
The 826,000-member, Tukwila, Wash.-based institution became subjected to the cap in the third quarter of 2012, its assets exceeded $10 billion. Debit card issuers with less than $10 billion in assets are exempt from the cap.
Speaking as part of a panel at the American Credit Union Mortgage Association 2013 Annual Conference, BECU Vice President of Treasury Mike Quamma said his credit union’s drop in interchange income is so significant, the credit union must consider it when pricing mortgages and other loan products.
Quamma later said if the Federal Reserve redrafts the regulation in a way that sets a lower cap, say $0.12 per transaction, BECU could see an annual drop of income in the range of $55 million.
“Right now we have a lot of good numbers so if this has to happen, it's better than it happen now than at another time,” Quamma said. “But obviously it’s not something we can ignore.”
U.S. District Court Judge Richard Leon overturned the current debit rule in response to litigation from retail groups who believe the cap was too high and directed the Federal Reserve to write a new rule. However, Leon’s orders to rewrite the rule were suspended pending appeal.