WASHINGTON — A panel consisting of advocates and experts from different sides of the ongoing debate over credit card interchange met on the same stage during CUNA's Governmental Affairs Conference. By the end of their 75-minute conversation, it appeared that none of their positions shifted much.
Even as the panelists all expressed a desire for compromise on the controversy of how the steadily more important part of the payments system should be supported, they all reaffirmed their points of view on why their positions should prevail.
The panel included Daniel Swanson, a lawyer and judiciary counsel to Illinois Sen. Richard Durbin (D); Jennifer Hatcher, senior director for government relations for the Food Marketing Institute, a trade association representing supermarket retailers; Mark Caverly, executive vice president of Local Government Federal Credit Union, headquartered in Raleigh, N.C.; and Jeffery Tassey, a principal in the lobbying firm of Tassey & Associates, whose clients include the American Bankers Association and MasterCard International.
Swanson signaled that Sen. Durbin may consider language more agreeable to the positions of credit unions and other smaller card issuers in credit card interchange legislation that may be introduced later this year.
A previous legislative effort in the last Congress failed.
"We are listening to everyone on this issue, and we are open to what credit unions have to say," said Swanson. "We don't want to put you all out of business.
What we are struggling with now is how to craft an interchange system which is more fair to all of the participants."
Swanson declined to say what specific protections might be included in the prospective measure or when it might be introduced, but he urged credit unions to make their case for why the current means of setting interchange is fair to all sides, particularly smaller retailers and businesses.
Hatcher made the case that retailers, particularly supermarkets, are saddled with expensive interchange fees that they can neither control nor renegotiate and that it eats into their already small profit margins.
"If someone loses a penny down the center aisle and someone else leaps up to chase it, I will know who the likely supermarket retailer is," Hatcher joked.
She also expressed some frustration that the card industry has made smaller issuers, which don't issue anywhere near the number of cards that the big banks issue, the face of the interchange issue.
"I understand it totally, that you would be the ones out front on the issue and not Citi or Bank of America," Hatcher said. "I think that's a brilliant move."
Caverly accepted Hatcher's characterization that credit unions are out front on the interchange issue because, he said, "fundamentally this is our fight."
Credit unions are leading the fight on interchange because they stand to lose the most if a law was passed to cut or cap card interchange.
"The big issuers have the size and economy of scale just to take a cap or a cut," Caverly said. "Credit unions don't have that luxury."
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