Momentum Builds For Fix Of Interchange
WASHINGTON – Several key lawmakers expressed support yesterday for a joint credit union and bank effort to delay the proposed rule capping fees on debit transactions, but none has committed to introducing a bill yet.
House Speaker John Boehner and Financial Services Committee Chairman Spencer Bachus both supported the position of credit unions and banks during remarks at CUNA’s Government Affairs Conference, and later in the day several House members endorsed a delay during a hearing on the effects of the Dodd-Frank Financial Reform Act.
But the House leaders acknowledged that any bill approved by them to delay the Federal Reserve’s final rule setting caps on interchange would have to be passed by the Senate, where the provision originated – a dicey proposition.
Still, a glimmer of hope emerged yesterday when Missouri Senator Roy Blunt said several of his colleagues are having second thoughts on the so-called Durbin amendment, named after his Democratic colleague from Illinois. Those colleagues, said Blunt, who moved over last fall from the House where he voted against Dodd-Frank, didn’t fully understand the ramifications of the carve-out, which exempts all credit unions and banks with less than $10 billion in assets from the Fed’s price caps.
And later in the day, Dick Durbin said it is possible the Senate will decide to take up the issue again, even as he stands steadfast against a reconsideration. Durbin said there is “no way to guarantee” that the Senate will not vote on a repeal of the interchange amendment. “Every day, members of the Senate offer amendments,” one of which could be a repeal of the swipe-fee rule, he said during a conference call.
Durbin’s remarks came as representatives of CUNA, NAFCU, the American Bankers Association and Independent Community Bankers of America were testifying before a House Financial Services subcommittee for Congress to intervene to delay implementation of the Fed rule, and as thousands of credit union executives in town for CUNA’s Government Affairs Conference were lobbying for a delay.
CUNA President Bill Cheney told the panel that the carve-out for smaller institutions will not work and is likely to result in lower fees for the exempt institutions, as well as the larger ones, to the detriment of credit unions.
“It will be disastrous for credit unions,” said John Buckley, president of Michigan’s Gerber FCU, testifying on behalf of NAFCU, which said it will end of up creating a major competitive advantage for the biggest issuers, who can conduct debit transactions at far lower prices than credit unions and community banks because of economies of scale.