Important Government Regulatory proposals
that will affect you
Each time you use your debit or credit card, a merchant is paid immediately and the credit union that issues your card receives an interchange payment. This interchange reflects a merchant's fair share of the costs of this convenient system. The current interchange arrangement helps keep the rates and fees lower that you pay on debit and credit card programs provided to you by your credit union. Recently, the United States Senate passed legislation (H.R 4173) to reform the financial regulatory system and the legislation included provisions that would make changes to the card payment system. We are asking you to take a few minutes, following the directions below, to tell your Senators and Representatives that interchange should not be a part of the financial reform bill.
There are several important things that you should know about interchange fees:
- Interchange fees are not directly paid by the consumer; rather they are paid by the merchants, like Wal-Mart, to support the card payment system.
- Interchange fees help us to offer our members debit and credit cards that include quality service and very attractive rates and fees.
- Your credit union, not a merchant, is responsible for absorbing losses from fraud and unpaid balances associated with card programs. Interchange fees support everything from re-issuing cards compromised by merchant data breaches, to providing a call center to contact if your card is stolen, to many other essential program functions. If interchange were reduced and could no longer contribute adequate support for card programs, consumers would end up paying more for their debit and credit cards.
What can you do to support the debit and credit card programs at your credit union and set the record straight?
Go to:
http://www.votervoice.net/Groups/INCUL/Advocacy/?IssueID=22057&SiteID=-1
Please send a message to both of your Senators and your Representative urging them to oppose including interchange legislation in the financial reform bill that would affect debit and credit card-issuing credit unions and the card payment system.
Below is contact information for faxing or calling your U.S. Senators and Representatives if you choose not to use voterVOICE
Title Fax Phone
Senator Richard Lugar (202) 228-0360 (202) 224-4814
Senator Evan Bayh (202) 228-1377 (202) 224-5623
Congressman Dan Burton (202) 225-0016 (202) 225-2276
Congressman Steve Buyer (202) 225-2267 (202) 225-5037
Congressman Andre Carson (202) 225-5633 (202) 225-4011
Congressman Joe Donnelly (202) 225-6798 (202) 225-3915
Congressman Brad Ellsworth (202) 225-3284 (202) 225-4636
Congressman Baron Hill (202) 226-6866 (202) 225-5315
Congressman Mike Pence (202) 225-3382 (202) 225-3021
Congressman Peter Visclosky (202) 225-2493 (202) 225-2461
* The 3rd District Office formerly held by Mark Souder cannot accept policy input.
Information for composing emails/faxes or for calling
Emails/faxes should begin as follows (the salutation is automatically provided when composing through voterVOICE):
The Honorable ______________
Member, U.S. Senate
or Member, U.S. House of Representatives
Dear Senator __________:
or Dear Congressman __________:
(Shown below are suggested points to emphasize in composing an email/fax or for when calling, in addition to other points specific to your credit union that you may choose to add):
- I am contacting you with great urgency today to ask you to oppose H.R. 4173, the Financial Reform bill, because of the inclusion of a harmful debit interchange provision. This legislation will hurt credit union members in every district across the country.
- Credit unions did not cause the financial meltdown yet credit unions continue to be collateral damage - during the crisis and now in the proposed solutions. Without the interchange provisions, the reform bill strikes a careful balance in protecting consumers while providing meaningful financial reform. However, the debit interchange provision in its current form would hurt credit unions and credit union members.
- The interchange provision directs the Federal Reserve to set the fees merchants pay to accept debit cards and, unfortunately, conference committee changes to the original Senate provision do not offer an acceptable solution. There is no mechanism to ensure that the small issuer “carve-out” included in the interchange provision will work. The provision offers no enforcement or incentive for the payment card networks to operate a two-tier interchange rate system. Inevitably, the interchange rate received by credit unions would converge on the large-institution rate set by the Federal Reserve.
- In addition, the Federal Reserve will not be permitted to consider all costs incurred by credit unions when operating a debit card program, therefore, the rate set will be much lower than the actual cost of operating a debit card program. In the interest of safety and soundness, my credit union may be forced to add fees to checking accounts and other products to recoup the losses caused by the artificially low debit interchange rate. At the same time, consumers are guaranteed no benefit in terms of reduced prices from merchants resulting from a lower debit interchange rate. In this difficult economy, these fees will have a disproportionate affect on low- and moderate-income consumers - the same consumers who are most likely to be credit union members.
- I am certain that increased costs to credit union members was not what proponents of H.R. 4173 originally intended, but it will be the reality unless the debit interchange provision is removed from the bill or modified significantly.
- I urge you to OPPOSE a financial reform conference report containing interchange.
This credit union is proud to offer you competitive and convenient debit and credit cards. Interchange payments help make that possible.
Sincerely,
MidWest America Federal Credit Union |
