BOSTON A new report argues that credit unions are clearly winners as a result of the Durbin rules, and the study’s author predicts if debit interchange is cut even further, those CUs with less than $10 billion in assets will win even more.
“If interchange goes down as a result of this latest court ruling, virtually all credit unions will benefit big time,” said Madeline Aufseeser, senior analyst in retail banking at Aite Group. “Banks will again find ways to add more fees onto checking and debit.”
Aufseeser bases the opinion on what her report illustrates. The study polled U.S. debit card executives on checking and debit card account trends and shows that CUs began winning as soon as the Durbin rules took effect in October 2011. More than 70% of credit unions in the study have seen steady increases in checking account growth, and more than 80% of credit unions have seen debit card account growth since 2011.
“Those large debit card issuers, with $10 billion or more in assets, are the losers,” said Aufseeser. “As we know, the Durbin Amendment placed margin pressure on debit card portfolios. Big issuers had to find replacement revenue and had few choices but to raise checking account fees and minimum balance requirements. Free checking as we know it, among banks, was virtually eliminated.”
Aite Group conducted the survey in May and June 2013 and plans a series of reports from the data. This first report isolates results from 67 credit unions with assets of less than $10 billion.
