Navy Federal Carved-In Again By Interchange Amendment
WASHINGTON – In the biggest independent lobby against the interchange amendment Navy FCU, one of three credit unions on the wrong side of the exemption from the amendment price-control provision, is calling on its 3.5 million members to urge Congress for defeat of the measure.
“We’re against the Durbin amendment as it is today. We think it should go through the formal committee process [in the House] so Congress can look at it from all angles,” said Jennifer Sadler, chief spokesman for the $41 billion credit union, of the amendment that was tacked on to the Senate version of the bank reform bill, though it was never voted in the House.
The nation’s largest credit union is no longer a dues-paying member of CUNA so it did not participate in last week’s fly-in lobbying effort on Capitol Hill. But it is working closely with NAFCU in fighting the measure, said Sadler.
At its website Navy Federal is urging its members all across the country to contact their members of Congress to ask them to oppose the amendment as congressional leaders work to merge the Senate version with the House version of the bank bill. The call to action asks members to “Remember that credit unions like ours did not cause the financial crisis. Legislation to reform Wall Street should not end up harming not-for-profit credit unions like Navy Federal or you, the members we serve.”
“This amendment,” says the call to action, “was encouraged by lobbyists of the big merchants to pass their costs for taking debit and check cards on to the backs of consumers, like you and the members we serve.”
It warns that any reduction in interchange could force Navy Fed to start charging an annual fee for the use of its CUCARD and Visa Check debit cards.
The amendment, sponsored by Sen. Richard Durbin, the Illinois Democrat, would direct the Federal Reserve to study interchange fees charged on debit transactions by the largest institutions – exempting those card issuers under $10 billion – and require those big issuers to roll back interchange fees if they are found to be too high.
The credit union giant is finding itself increasingly on the wrong side of exemptions – so-called carve-outs – from legislation. Another carve-out in the bank bill would exempt all credit unions from being examined by a new consumer financial protection agency. Navy Fed is one of only three credit unions, along with North Carolina State Employees’ CU and Pentagon FCU, that are over $10 billion and thus not carved out.
The Durbin amendment would also require Visa and MasterCard to scrap network prohibitions preventing retailers from offering customers discounts for the use of cash instead of debit; or from offering discounts for low-fee cards.