As Federal Reserve Chair Jerome Powell testifies before U.S. House and Senate committees this week to present the semiannual monetary policy report, America’s Credit Unions is reiterating credit unions’ strong opposition to the Fed’s debit interchange proposal. President/CEO Jim Nussle wrote to both the Senate Banking Committee and the House Financial Services Committee ahead of Powell’s appearances.
“This proposal is seriously flawed. A skewed methodology for assessing base component costs fails to give appropriate weight to the cost experience of most covered issuers, especially credit unions. Additionally, the Notice of Proposed Rulemaking (NPRM) does not consider the market impact of recent amendments which went into effect in July 2023, requiring dual routing for card-not-present transactions,” wrote Nussle. “The July 2023 amendments and resulting changes in merchant routing behavior will have a direct bearing on the overall monetary impact of the revised interchange fee cap for both covered and exempt issuers.”
In addition, he called on the committee to support the Secure Payments Act, legislation introduced in June that would halt implementation of the rule until its impact can be studied.
America’s Credit Unions submitted detailed comments in April, calling on the Fed to withdraw the proposal, and will continue to be vocal on this issue on behalf of the credit union industry.
