Monday, March 14, 2011 12:20:00 PM
NEW YORK - Credit unions' efforts to maintain current debit card interchange fees and CUNA Chief Economist Bill Hampel's thoughts on why the Federal Reserve shouldn't cut them were highlighted in separate media reports last week.
An Associated Press account of the grassroots lobbying efforts of financial institutions versus merchants referenced the 4,000 attendees of CUNA's annual Governmental Affairs Conference were in Washington, D.C., earlier this month and how interchange was at the top of their agenda during Capitol Hill visits.
Fox Business Network also noted last week's Washington fly-in by roughly 100 retailers urging Congress to roll back interchange rates. Fox turned to CUNA Chief Economist Bill Hampel for the countervailing view. Hampel stressed how the new interchange law and proposed rules from the Federal Reserve would end up hurting consumers.
"If financial institutions have to cover all of the costs or virtually all of the costs of debit, they will have to make it up somewhere," he explained. "And the most likely way to make that up is through increased fees on the consumers who use the debit cards."
A Saturday Wall Street Journal article points out that concerns are now mounting regarding the effect the cap will have on financial institutions' ability to serve the poor.
"Critics say that by limiting fee revenue, the rules could drive banks to drop free checking and other services that poor customers rely on," the article explains.
Though the law included a fee-cap exemption for small banks and credit unions, "those institutions say the exemption won't work in practice and small banks would be forced to lower their interchange fees to remain competitive."
The Associated Press article is available at http://www.npr.org/templates/story/story.php?storyId=134430576
The Fox Business segment is available at http://video.foxsmallbusinesscenter.com/v/4581067/dc-report-debit-card-swipe-fee-battle
The Wall Street Journal article is available at http://online.wsj.com/article/SB10001424052748703327404576194950657660510.html?mod=googlenews_wsj