As the Oct. 1 deadline for the Durbin amendment interchange cap to go into effect draws near, consultants who work with credit unions on managing their debit programs are urging CUs to focus more attention on their debit programs.

All but the three largest credit unions – Navy Federal, State Employees' CU of North Carolina and PenFed – are exempt from the cap, but analysts contend that even those exempt CUs will see their interchange income erode under the weight of the cap's interchange limits and processing rules. And if credit unions have not taken the steps to better familiarize themselves with their debit programs and how to manage them, how will they know how much of an erosion they are seeing in their debit income, the analysts ask.

“I am confident there are still credit unions, particularly smaller-asset credit unions that lack sufficient staff, that don't know how much income they get from their debit programs or what they need to do improve it,” said Ron Silvia, director of Debit Services at PSCU Financial Services. “That will make it very difficult to measure the impact of the Durbin Amendment over time on their income.”

Bill Lehman, portfolio consultant with Card Services for Credit Unions, the association of credit unions that process their card transactions with FIS, agreed but noted that processing changes that the amendment included are also helping more CUs manage their debit programs more effectively.

The amendment requires that debit cards have at least two unrelated networks available to route transactions and the work of reviewing existing processing relationships or accepting bids for new ones has helped many CUs focus on their programs, Lehman said.

“The important thing is that CUs understand at least the outline of how their programs work and be able to read reports which can show them where their transactions might be gaining or losing money over time,” Lehman said.