Saying that the Federal Reserve's proposed interchange rule could have "tragic consequences" for credit unions, their members and any debit card user, CUNA President/CEO Bill Cheney today asked the leaders of the House Financial Services Committee to hold hearings.

Cheney noted that the amendment giving the Fed the power to regulate interchange was passed without any hearings having been held. He said CUNA's objections center on the fact that there is "no assurance in the law or the proposal that any savings for merchants as a result of the government-set interchange fee caps and other provisions will be shared with consumers; however, the Board's proposal ensures that interchange fees will be lower than the cost of providing payment services. This means that credit unions and other issuers will have to find other ways to recover these losses."

The Fed's proposed rule capped debit interchange at no more than 12 cents per transaction. This would be a flat fee whereas debit interchange is currently calculated as a percentage of a transaction, often around 1%.