ACTION ALERT – interchange legislation.
It’s a busy week in our nation’s capital, as the House and Senate are back in session with several key oversight hearings, including one on the CFPB as well as work on 2024 appropriations bills and the National Defense Authorization Act (NDAA).
However, the interchange issue is front and center. The CUNA League system joined with several other financial services trade organizations to warn lawmakers about the harmful impact this Credit Card Competition Act legislation that expands interchange price controls will have on consumers, credit unions, and other financial institutions. In the letter, we highlighted the Government Accountability Office (GAO) report that found the 2010 Durbin Amendment was “among the top five laws and regulations most cited…as having significantly affected the cost and availability of basic banking services.”
“Further, the merchant lobby’s promise that this regulation would result in savings for consumers never happened – the merchants pocketed the savings,” the CUNA League system shared. “According to the Federal Reserve Bank of Richmond, after the Durbin Amendment was implemented, 98.8% of merchants failed to pass through savings realized from debit regulation to consumers, and over 20% increased prices.”
Even though this bill limits the new requirements to institutions over $100 billion in assets, we flagged that, under the Durbin Amendment, community banks and credit unions still suffered a 30% decrease in their interchange revenue – not to mention opening payment systems to benefit big box stores while hurting consumers and small businesses. The bill would extend the debit routing provisions of the 2010 Durbin Amendment to credit cards.
If you pull back the curtains on this legislation, it’s really backed and supported by big-box retailers, who don’t care about consumer security or credit or debit card breaches.
Action Alert – Please reach out to our Dakota delegation and let them know the Credit Card Competition Act (CCCA) of 2023 will have serious consequences for credit unions and their members if passed. We strongly oppose this legislation and need your help telling Congress how changes to interchange would negatively impact your credit union and members. If you haven’t already done so, please visit the Grassroots Action Center today and send a message to your legislators.
Also happening on the Hill this week.
CFPB Director Rohit Chopra will appear before the Senate Banking Committee and House Financial Services Committee. In addition, Treasury Secretary Janet Yellen will testify before the House Financial Services Committee on international finance system issues, and the committee will hold another hearing on digital assets in the afternoon.
As committees begin to markup appropriations bills, the House Armed Services subcommittees begin work on the NDAA, with a full committee markup scheduled for June 21.
The Federal Open Markets Committee (FOMC) begins its two-day monetary policy setting meeting, though whether members will decide to raise rates is uncertain, and the House Small Business Committee holds a hearing on private and public resources to support small businesses. In addition, the Senate Banking Committee holds a hearing on the state of Native American housing; and finally, the Senate Finance Committee holds a hearing on anti-poverty and family support provisions in the tax code.
Please contact Jeff Olson or Amy Kleinschmit with any of your advocacy questions or concerns.
The Memo is DakCU's newsletter that keeps
Want the Memo delivered straight to your inbox?