Thursday, June 09, 2011 12:36:00 PM
WASHINGTON - In a vote Thursday, the Tester-Corker interchange bill to stop, study and start over on the interchange rules was defeated in the Senate. The measure received 54 votes, six short of the 60 needed. There were 45 senators who opposed it. Both New Jersey senators, Sen. Menendez and Sen. Lautenberg, voted against the bill.
The Fed's proposed interchange regulations, which now seem to be on track for at least the fee cap provisions to go into effect July 21, would limit debit card transaction fees to as little as 12 cents per transaction, if adopted as proposed. The amendment would have mandated financial regulators, including the Fed and the NCUA, to perform a six-month study to consider the effect of the interchange fee cap on financial institutions and consumers.
The bill's defeat deeply disappointed credit unions and CUNA, who promptly after the vote, sent a letter to all Fed governors to reiterate several recommendations that could help insulate small issuers from the negative impact on their income that many fear will be the result of the Fed's current proposal. CUNA and credit unions plan to continue pressing the Federal Reserve to improve the proposed rule to minimize negative effects on credit unions and their members.
CUNA President/CEO Bill Cheney said that CUNA has made it clear that these cap rules "will impose a severe hardship on credit unions with debit card programs, draining the revenue they need to offset the costs of providing card services."
The Senate "missed a huge opportunity to get this right," and credit unions are "deeply disappointed the Senate disregarded the more than half a million contacts made by credit unions and their members over the last three months in failing to pass the Tester-Corker amendment," Cheney stated.