A letter from NAFCU to the chairman and ranking member of the Senate Judiciary Committee has argued that credit unions would be particularly hurt by a proposed cap on card interchange.
In the June 12 letter to Committee Chairman Patrick Leahy (D-Vt.) and Ranking Member Jeff Sessions (R-Ala.), NAFCU said an interchange cap proposed in S. 1212 would particularly harm credit unions because they are smaller than other card issuers and lack the resources to weather a card interchange cut.
"Further, S. 1212 may indeed make it more difficult for credit unions to compete as credit unions are, generally, smaller in size and do not have the economies of scale of larger banks," NAFCU Senior Vice President for Government Affairs Dan Berger wrote.
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"The legislation quite clearly states that the three-judge panel will set a single rate that is operative for all institutions and merchants that use the payment system. The legislation also states that the judges are to 'consider the costs necessary to provide and access an electronic payment system for processing credit and/or debit card transactions as well as a normal rate of return' when determining prices. Credit unions, being much smaller than banks, and lacking economies of scale, have a higher per transaction cost for processing card payments," he added.
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