IMPORTANT MEMBER CALL TO ACTION
We are asking your help in reaching our representatives in Congress to oppose the interchange provision of the final financial reform bill.
This provision will have unintended consequences for credit union members like you and every consumer with a debit card in his or her wallet. It has not been thoroughly studied and does not belong in this bill.
What is Interchange Fee?
Merchants receive tremendous benefits when they choose to accept debit and credit cards as a form of payment. They are paid immediately, and they do not have to deal with cash or wait for a check to clear. Like electricity or rent, the interchange fee that the merchant pays is a cost of doing business. The proposed government rate controls on interchange reduces the merchants’ responsibility to pay for the benefits received from the card payment system and will drive up costs for credit unions and their members.
How will this effect the Credit Union?
My credit union incurs significant expenses in operating its card payment system. For example, the credit union is responsible for administration of card programs, customer call centers, and reissuing cards in cases of merchant fraud. Interchange supports these costs. If interchange fees were reduced, the credit union and other small financial institutions would be forced to raise rates and fees for card services. In fact, the credit union might even have to curtail debit and credit card services for members, and that might force me to move my account to a big bank that offers cards at a higher price. Furthermore, there is no evidence to suggest that merchants would pass along any savings resulting from lower interchange to consumers.
This provision offers no real “exemption” or “carve-out” for credit unions; if it were included, merchants and big banks would set rates that would make it impossible for my credit union to compete. In the end, merchants could refuse to accept the credit union debit card I rely on for everyday purchases.
WE NEED YOUR HELP!
As a member, we are asking your help in communicating with our lawmakers. The interchange provision requires a more thorough review and does not belong in this bill. Please download the attached sample letter and Congressional contact list. If you would like the letter in MicroSoft Word format, please e-mail us at memberservices@cmccu.com.
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