The merchants aren't doing enough to comply with anti-fraudrules and therefore community banks and credit unions have littlefaith that they will comply with rules mandating that merchantsdon't discriminate against debit cards from small issuers.

That's the message that the two largest bank groups and the twolargest credit union groups conveyed in a letter to lawmakersyesterday disputing a letter that a coalition of merchant groupssent last week.

“It is remarkable that the same groups advocating for weakenednetwork operating rules would now hide behind them in their defenseof government price controls. Merchants know that enforcing theserules among the millions in their ranks is impossible,” CUNA,NAFCU, the ABA and the Independent Community Bankers of Americawrote.

The letter cited concerns raised by Federal Reserve Chairman BenBernanke that the small issuer exemption may not work as intendedin the marketplace. The trade associations urged lawmakers to passlegislation that would delay implementation of the Fed'sinterchange rule.

The Federal Reserve has issued a proposed rule on interchangethat is supposed to take effect in July but hasn't issued a finalrule.

Bills have been introduced in the House and Senate that woulddelay the implementation of the rule and mandate that financialregulators, including the NCUA, study the issue.

To read the Senate bill, S. 575 or the House bill, H.R 1081, goto: http://thomas.loc.gov

To read the Fed's proposed rule, go to: http://edocket.access.gpo.gov/2010/pdf/2010-32061.pdf