Fed Scheduled To Reveal Swipe Fee Rule This Week
WASHINGTON-The Federal Reserve Board is scheduled to issue its final rule on a controversial swipe fee provision next week, according to a public notice released last Tuesday.
The central bank announced it will hold a public meeting on June 29 to discuss the plan. The final rule will be released less than a month before it is supposed to take effect on July 21.
Several industry groups are hoping the Fed will push back the effective date to give banks more time to transition to the cap.
Banks, credit unions and others are also pushing the central bank, following 11,000 comments it has received on its initial December proposal, to lift the planned 12-cent swipe fee cap. Analysts have been widely anticipating the Fed will raise the limit to as high as 20 cents.
Such a move would be a significant improvement, but would still fall short of the industry's average of 44 cents per transaction.
Other issues still left unclear are whether issuer network fees used to pay for the cost of each transaction are included in the Fed's calculations for the cap, and if any substantive changes will be made to ensure that banks under $50 billion are exempted.
CUs Named In Suit That Alleges Patent Infringment
WILMINGTON, Del.-Global technology vendor Serverside Group filed suit in federal court last week claiming dozens of credit union groups and banks are infringing on its patents for card customization technology.
The suit, filed in U.S. District Court for Delaware, names PSCU Financial Services, The Members Group, Credit Union 1, Neighbors CU and Anheuser-Bush Employees' CU among the defendants. Also named are CPI Card Group, HJA Payment Processing Solutions, T8 Webware, DimpledoughInc., Design One Creative, United Solutions Co., American State Bank, Eastern Bank and Bank Iowa.
Card customization allows credit unions and banks to personalize credit and/or debit cards with a user's own photo or the logo of their favorite sports team, for example, and is increasingly popular among consumers. "From the moment we first developed digital card customization, we realized that it would have enormous value for card issuers and cardholders alike," said Adam Elgar, president of Serverside Group. Serverside provides card services in 27 countries to more than 200 clients, including RBS Group, ING, Fortis, BMW, and Heritage Building Society.
More Troubled CUs Merged Out
ALEXANDRIA, Va.-NCUA said last week it approved an application from Webster First FCU in western Massachusetts' Worcester to acquire Saugus FCU, a troubled $60-million credit union all the way across the Bay State in Boston's northern suburbs.
The $500-million credit union's cross-state acquisition gives Webster First two branches and a new field of membership in the suburbs north of Boston, more than 100 miles from its headquarters. The deal is one of several merging troubled CUs.
NCUA said it also approved the combination of American 1 CU, in Jackson, Mich., with ailing Premier Financial CU in nearby Clinton, Minnesota's TruStone FCU with troubled Ukrainian FCU, and Washington, D.C.'s Transit Employees FCU with troubled Hospitality Community FCU in Washington.
NCUA approved the merger of Seattle's Watermark CU with Tacoma's Sound CU to create a $1.2-billion statewide credit union in Washington. NCUA also approved two deals for Western Cooperative FCU, North Dakota's fourth-largest credit union: one for Ray Cooperative FCU, an $11-million credit union, and the other for tiny Glen Ullin FCU.
CUs Join In 'Bank On Toledo'
TOLEDO, Ohio-Four credit unions and seven banks are working together here with the city's Bank on Toledo program, aimed at getting the unbanked into mainstream financial services. "There are 43,000 households in Toledo that do not use the banking system," Mayor Mike Bell said as he introduced the program.
Bell said many people still hide their money inside their homes, rather than use a bank.
The institutions involved are Directions CU, Great Lakes CU, Nueva Esparanza CU, Toledo Urban FCU, Charter One Bank, Fifth Third Bank, FirstMerit Bank, Huntington, KeyBank, PNC Bank and State Bank and Trust Co.
The credit unions and banks are investing money to help advertise the program and educate people, who would in turn become new members and customers. The program includes the ability to open a free or low-cost checking account, keep an account open without a minimum balance, open an account even if a person has had banking trouble in the past, and open an account without a Social Security number.