WASHINGTON — NAFCU last week launched efforts aimed at repealing the Dodd-Frank Act's debit interchange amendment, calling on Senate leaders to eliminate the provision they approved just last year.
"The Durbin Amendment, which called on the Federal Reserve to implement burdensome new price caps on debit interchange fees, was a hastily included provision that was never fully considered or even debated by the Senate," Dan Berger, chief lobbyist for NAFCU, told leaders of the Senate Banking Committee in a letter. "Last-minute handwritten modifications on the Senate floor were never deliberated and did little to alleviate the concerns of small financial institutions like credit unions."
The NAFCU leader was referring to the introduction of the controversial amendment to the landmark financial reform bill which was added to the bill with no debate by Democrats or Republicans.
"Instead," wrote the credit union lobbyist, "this price-fixing language interjects the government between two industries and destroys a system that was developed by the free market and has worked successfully for the American public, as evidenced by the continued record use of debit cards during the holiday season. In fact, based on the Federal Reserve's proposed rule, it appears that the worst case scenario is materializing."
NAFCU sent a similar letter to leaders of the House Financial Services Committee today and the Electronic Payments Coalition, comprised of banking and credit union groups, as well as Visa and MasterCard have also begun working for repeal.
NAFCU's bid comes as credit unions, which are meant to be exempt from the interchange provision, are deluging the Federal Reserve with comments saying the Fed's proposal to slash interchange by an average of 70% for the largest institutions will negatively impact them too. The credit unions overwhelmingly say the market will not support a two-tiered system — one tier of lower fees for large institutions and one for smaller ones.
