FORT LAUDERDALE, Fla. — Protecting card interchange income made center stage at Card Services for Credit Unions annual meeting here this year.
In previous annual meetings the topic of interchange tended only to hover at the edges of the gatherings, usually as part of discussions of what credit unions could do to earn more of it. How much of an impact on card usage and interchange would a summer vacation promotion bring? What's the best approach to get your members to make sure to sign their card receipts and thereby earn more interchange rather than enter a personal identification number?
But this year, driven in part by the introduction of a federal bill that could dramatically cut card interchange, the topic elbowed its way onto the CSCU annual meeting agenda, delivered by one of the highest ranking Visa executives to address the event.
William Sheedy is a Visa executive and strategist and one of the key leaders in the card brand's battle against the retail lobby over the card fees that Visa and MasterCard set and collect in part for their issuers.
"As we meet here," Sheedy told the executives, "there is a hearing going on before the House Committee on the Judiciary about a bill which, if passed into law, would leave a panel of judges and not the market in charge of credit card interchange," Sheedy said. "Since I believe interchange is very important to your card program, I urge you to get involved on the topic."
Introduced by Reps. John Conyers (D-Mich.) and Chris Cannon (R-Utah), H.R. 5546 would mandate negotiations on card interchange between the card brands and retailers and put a judicial panel into place to impose an interchange rate if no settlement could be reached.
Sheedy didn't just come to talk about the topic. He also brought a packet of tools designed to transform the executives into active communicators with lawmakers on the issue of card interchange. The packet included fact sheets about the interchange issue, talking points about it, an address list of federal lawmakers broken down by state and a sample letter on the topic. It also included a copy of a legal decision which the card brand won against retailers on the point.
Sheedy, Visa's head of global strategy, called on the executives to help educate lawmakers about the importance of interchange not just to big banks and issuers but to smaller institutions as well.
"Merchants are not going away so this is going to be an effort that has to continue for the next 12 to 24 months. So if this issue is important to you, and I think it is, we want you to get involved in the effort to help lawmakers understand the issue," he said
Sheedy later explained he had not meant to imply that the issue would go away in 24 months, only to encourage the executives to take the longer view and keep restating the points to make sure they are firmly part of the public record.
–dmorrison@cutimes.com
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