Payments/Credit/Debit

A few credit unions have begun to detail the impact of the Federal Reserve's proposed cap on debit card interchange, telling the agency that its proposed rule will sharply hurt their bottom lines.

The number of Americans who have bank accounts is likely to drop in the coming months as financial institutions seek to make up the costs of additional regulation with greater fees.

TMG Financial Services, the card portfolio purchasing and agent issuing arm of the The Members Group, said it grew from both additional card portfolio purchases and from card use last year.

Debit card rewards programs at credit unions will survive the coming downturn in debit card interchange, but they will have to change and broaden their foundations in order to remain a part of credit union programs and services.

The Federal Reserve's proposed rule regulating interchange will be the subject of a Feb. 17 hearing of the House Financial Services Committee's Subcommittee on Financial Institutions.

Starting this year, at least some underbanked or unbanked tax payers will be able to receive their tax refunds on prepaid Visa branded debit cards.