Tuesday, April 05, 2011 11:32:00 AM
An editorial in today's USA Today speaks in favor of the retailers' position on interchange fees. Right next to the editorial, CUNA President/CEO Bill Cheney responds with the "opposing view," in a column pointing out the proposed interchange rules will mean higher fees, and that's anything but "pro-consumer".
The USA Today editorial includes rhetoric favoring the new law and cites "bank bailouts," "lining the pockets of Wall Street", and "pro-consumer" as justification. In his response, Cheney sets the record straight concerning credit unions and community banks, stating "We are Main Street; nobody is lining our pockets."
"The rules proposed by the Federal Reserve will harshly curb what credit unions earn to cover the costs of debit cards to their members," Cheney explains.
The same cannot be said for banks, he points out. "For big banks, recovering all the true costs might not be a big deal; they already charge very high fees, and some have said that free checking is a thing of the past," he states. Credit unions might also have to pass the costs on to their members, however "it's the last thing credit unions want to do, but they might have no choice."
None of these repercussions were considered in the debates over the law last year, the CUNA President points out, in part because of an exemption for small institutions. However, "we don't expect this exemption to work, due to market forces and the absence of any enforcement mechanism."
Cheney closes by calling for a delay of these rules and a study of the real impact of the law.
The USA Today editorial and Cheney's response is available at: