Credit unions would be placed at a competitive disadvantage and could lose money if Congress passes legislation designed to clamp down on interchange fees, CUNA and NAFCU wrote lawmakers.
"The merchants' legislative proposal to reduce interchange would unfairly disrupt a functioning marketplace by giving merchants an enormous competitive advantage over card-issuing credit unions in interchange negotiations," CUNA President/CEO Dan Mica wrote all House members.
NAFCU President/CEO Fred Becker wrote that the legislation would make it harder for credit unions because of the costs that credit unions assume when issuing credit cards.
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"Artificially capping interchange fee rates would have a significant impact on credit union card services by handicapping their ability to offer these services to their members. Additionally, the unique member-owned cooperative nature of credit unions means that they act in the best interest of their members if financial data is breached, often reissuing compromised cards to their members and working with them through what is often a difficult situation."
Mica urged lawmakers not to take any action at least until the Government Accountability Office completes its study on the subject.
One bill on the subject, HR 2695, would mandate interchange fee negotiations between merchants and card issuers. It is similar to a bill passed by Conyers' committee last year but never considered by the full House and exempts credit unions regulated by NCUA and others with under $1 billion in assets.
The other bill, HR 2382, would allow merchants to steer consumers toward certain kinds of debit and credit cards based on the interchange fees and mandate the card issuers disclose interchange fees. It also gives the Federal Trade Commission additional regulatory powers in this area.
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