Overturning a proposed debit interchange cap on legal grounds may set a precedent against exempting credit unions from future regulations that affect large banks and other financial institutions.
The interchange cap, loan demand, compliance burdens and corporate pricing are all figuring in the early discussion of those newly named Federal Reserve panels composed of bank and credit union CEOs.
Rep. Shelley Moore Capito (R-W.Va.) plans to introduce later today a bill that would delay the implementation of the Federal Reserve’s debit interchange rule by one year.
Community banks could lose money and consumers could have to pay higher fees if the Federal Reserve implements its debit interchange proposed rule as is, FDIC Chairman Sheila Bair wrote Federal Reserve Chairman Ben Bernanke.
The initial reviews are in from the meeting this week between credit union CEOs, community bank CEOs and top brass of Federal Reserve banks, and so far the assessment of what was discussed on everything from interchange to Fannie/Freddie status was favorable.
Credit unions should continue to throw themselves body and soul into fighting a looming cap on debit card interchange, but should do so without any significant expectation that they will succeed.
Comment letters, congressional testimony and in-person visits with lawmakers in Washington are key components of a concerted strategy to kill, delay implementation of or at the least modify the Federal Reserve’s proposed rule on debit interchange fees.
If you don’t tell people what is on your mind, they’ll never know. The credit union industry has taken this to heart on the interchange issue.
Since its introduction last year as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the interchange price cap amendment has been a source of great consternation for our industry. NAFCU, both in principle and substance, has fought it fervently.
Two members of the Senate Banking Committee wrote Federal Reserve Chairman Ben Bernanke asking him to "create a workable small issuer exemption," in the debit interchange rule that the Fed is writing.