Friday, January 21, 2011 11:27:00 AM
NEW YORK - The Huffington Post news and opinion Web site has published several reports recently characterizing the new debit interchange law and Fed proposal as a loss for big banks but a win for credit unions and community banks. In response, CUNA President/CEO Bill Cheney submitted an op-ed piece Thursday, titled "New Interchange Rules for Debit Cards: A Perceived 'Win' Is Really a Loss".
In his column, Cheney sets the record straight stating, "No financial institution - and more importantly, none of the millions of Americans who use their services - is a winner here."
Consumers will be hit hardest, Cheney explains. They can expect "higher fees or diminished debit card services as financial institutions deal with the new reality that is expected to ensue if a regulatory proposal now being circulated by the Federal Reserve is allowed to go into effect."
As not-for-profits, credit unions depend on interchange revenue to underwrite the cost of offering debit cards to their members. Based on how these new rules are shaping up, credit unions feel they have no choice but to offset the lost income by imposing new fees on checking, debit transactions, or other services, or stop offering the cards altogether. "That goes against our normal practice," Cheney points out.
Credit unions are encouraged to post comments in favor of the credit union position below Cheney's column in the "reader comments" section of the page. The column can be found at http://www.huffingtonpost.com/bill-cheney/new-interchange-rules-for_b_811091.html.