Members of the Senate Judiciary Committee discussed interchange fees at a hearing Wednesday, with several noting arguments made by CUNA, Leagues, and credit unions about their importance. The committee examined interchange fees and the Durbin Amendment, part of the Dodd-Frank Act that caps debit card interchange fees.

Credit unions strongly oppose any expansion of the Durbin Amendment, which CUNA believes is the “purest example of a failed government policy.”

CUNA submitted several comment letters on the hearing, including a joint letter with the American Association of Credit Union Leagues and all state Leagues, as well as with other organizations.

“Big-box retailers like Walmart and Amazon have seen a $250 billion boost in sales in the past two years alone, but they still want Congress to further pad their profit sheets at the expense of consumers’ ability to access credit,” said CUNA President/CEO Jim Nussle. “America’s not-for-profit credit unions rely on interchange fees to keep consumers—and the merchants they buy from—safe and whole when data thieves and card hackers exploit weak links in the payments system. Any potential expansion of the Durbin Amendment would hurt community-focused credit unions and the 130 million members who rely on them to make life work.” 

Sen. Chris Coons, D-Del., said the issue requires Congress to look at “all sides of the transaction universe,” including financial institutions, card companies, merchants, and consumers. He specifically noted how credit unions and other institutions depend on interchange fees.

“Credit unions and community banks in particular are concerned that a substantial decrease in interchange would mean they can no longer sustain card programs that extend credit to individuals who might otherwise not be able to be able to access credit cards,” he said. “The issue here isn’t just losing rewards programs, but access to credit and losing the ability of smaller issuers to participate and compete.”

Other members of the committee, including Sens. Marsha Blackburn, R-Tenn., and Thom Tillis, R-N.C. referenced a Government Accountability Office study CUNA referred to in its comments for the hearing.

The study ranked the Durbin Amendment as among the top five laws and regulations most cited as “having significantly affected the cost and availability” of basic financial services. It also concluded that the regulation was associated with increases in the costs of checking accounts and a decrease in the availability of noninterest checking accounts without monthly fees.