The President’s Perspective

The Credit Card Competition Act harms consumers and access to credit – an op-ed submitted over the weekend! Plus, Holiday Sweepstakes winners of $5,000 in prizes are announced! 

Greetings all, and welcome to December. Even as the early snow and cold hits the region, most of us are focused on finishing the year strong and on a positive note, not to mention trying to work in time to enjoy holiday festivities.

I hope you can join us for our final virtual CEO Town Hall of the year next Tuesday, December 13 at 3:00 p.m. (CT). Dakota credit union CEOs should have already received a calendar invite along with the meeting link. If you need that information again, feel free to reach out to me. We’ll provide updates on urgent legislative and regulatory issues, and we’ll tee up several events and activities that you should include in your 2023 plans.

As a reminder, the Credit Union Women’s Leadership Alliance (CUWLA) Executive Director, Linda White, will be our special guest during the Town Hall. CUWLA has a vision of providing a safe space for women CEOs of credit unions with asset sizes up to $300 million – offering mentorship, education, and collaboration to help them thrive. This is very timely information for our region, as here in the Dakotas, we have 42 women who sit in the president/CEO/manager chair. That means that 63 percent of the leadership positions in the Dakotas are held by women! Therefore, it is important to find out how CUWLA “Empowers the women who power the movement.”

Credit Card Competition Act harms consumers and access to credit.
Many of you have received a request for information from the Credit Union National Association on credit card and debit card interchange data. I hope you can find time within the next two weeks to provide the needed information, as this data will help construct our defense against the Credit Card Competition Act as we go into the 118th Congress. Take the survey here.  

Over the weekend, I submitted an opinion editorial on the proposed Credit Card Competition Act to multiple media outlets across the Dakotas, which included, in part, the following language:

This is a “trojan horse” bill, putting big retailers ahead of hard-working Americans with no regard to consumers or security, leaving us more exposed for fraud.  
 
Credit unions and other card issuers provide fraud protection, card replacement, and cover losses from security breaches with the interchange fee that is added on each swipe. Generally, this is a few cents per transaction; businesses already know this and have priced their merchandise to cover these costs. At most point of sales, consumers choose payment options while merchants get funds authorized, cleared, and settled immediately.

The Credit Card Competition Act puts all that in jeopardy. This anti-consumer piece of legislation allows merchants to choose which card network to process a transaction, which means the best rate (not the most secure) wins. It leaves consumers and their financial institutions on the hook for increased fraud costs and exposed personal data. Could this lead to our networks being owned and operated by other countries, even the Bank of China?

What’s at stake here is secure transactions, fraud prevention, and financial privacy. As card issuers face increased costs, fraud skyrockets, and more cards need to be replaced, many providers would simply exit the market. The winners will be big box retailers and the losers will be consumers stuck with higher fees, less access to credit, and more exposure to fraud and security breaches.

This bill hasn’t had a single congressional hearing, but its sponsors are trying to tack it onto important funding bills without a concern or study entered into the congressional record. The bill’s sponsors are trying to run this through in the closing days of Congress rather than engaging in thoughtful discussion about potential negative effects.

We’re still hurting from the last time Senator Durbin made an amendment to enacted legislation, as the Dodd-Frank Act’s Durbin Amendment increased costs for everyone except big retailers, who kept the profit from Durbin’s interchange cap for themselves. The Richmond Federal Reserve found 98.8 percent of merchants failed to pass any savings from the interchange cap to consumers, and the Government Accountability Office found the Durbin Amendment among the top regulations negatively impacting access to affordable credit.

Yet, here we are again, ready to give these merchants another windfall. This anti-consumer bill will cause massive harm to those who can least afford more economic hits. It should not go further in the legislative process.

Thank you to all our Holiday Sweepstakes supporters!
The 2022 CUPAC/CULAC Holiday Sweepstakes is in the books. Thank you to all our participants who supported our annual fundraiser. Your support is important and necessary in our continuing efforts to educate lawmakers on the credit union difference and our special tax status as financial cooperatives.
 
We knew coming in this year that switching to an on-line platform would be a challenge. The new format will take some time getting used to, but the online platform is less expensive to administer and much more efficient to coordinate for everyone, with no paper tickets to track and input by hand, no waiting for checks or cash, no waiting for mail to get here on time, and no administrative reconciling of contributions. We’ll continue to use an on-line platform moving forward.

Having said that, the DakCU team here has made several observations on how we can improve and better maximize our fundraising efforts next year. We will be putting together some “best practices” guidance and sharing that with our two GACs in the new year. 
 
With some last-minute support coming in, we were able to raise $9,092 which will be used to support federal and state credit union-friendly lawmakers. Every contribution is helpful and appreciated! You can find the winners’ names posted here on our website.
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MonDak Early Bird Registration expiring soon
Don’t forget – you can save $50 per registration if you sign up for the MonDak Roundtable by December 15. That’s less than two weeks away, so be sure to make your plans now to join us for high-level discussion and thought leadership from your credit union peers in our region. This conference is exclusively for senior management, CEOs, and volunteer board members, and just as in years past, we have an exciting, fast-paced two-day schedule of diverse, informative sessions. This is an amazing educational opportunity for board members to further their skills in evaluating credit union finances, monitoring policies and practices, and guiding your credit union’s future, as well as an exclusive opportunity for credit union leaders to collaborate and share ideas. Sign up here.
 
Congratulations to Highmark FCU and Black Hills FCU
Finally, I would like to send a shout out to two of our Rapid City, South Dakota area credit unions for being recognized by the Small Business Administration for their commitment to providing more access to needed capital. Black Hills FCU, led by Jerry Schmidt, and Highmark FCU, led by John Carlson, both recently received the SBA SD 2022 Leadership in Lending Awards. Congratulations to Jerry, John, and their teams, and once again, thanks for all you do to support your members and the communities you serve!
 
Have a great week! 

DakCU President/CEO