BISMARCK, N.D. (2/10/15)--On Friday the North Dakota House voted down a proposed debit card bill. The legislation would have reduced the time allowed to release a debit card hold when the transaction was satisfied by another payment type.
Representatives of the Credit Union Association of the Dakota appeared before the state House Industry Business and Labor (IBL) Committee last week to voice their opposition to HB 1460 (News Now Feb. 5).
Typically, hotels, car rentals, gas stations and airlines are instances were merchants put extended holds on debit cards. For most credit unions, the time of the hold depends upon how quickly each merchant completes its transactions. If the merchant doesn't complete its authorization within four days, the hold would fall off and the funds would be available to the member again.
Credit union advocates testified that the bill would cause an unnecessary burden on credit unions without any significant off-setting benefit to consumers.
The committee responded with a 13-0 "Do Not Pass" recommendation.
"It protects the merchant from an insufficient funds notice, or the inconvenience of chasing down and collecting non-paid funds, and it protects the consumer from overdrawing and having to pay overdraft fees," stated Jeff Olson, CUAD executive vice president of government advocacy, said his testimony (Memo Feb. 9.)
Following the hearing, CUAD launched a grassroots alert calling on member credit unions to contact legislators to oppose a debit card bill.
It is CUAD's opinion that the bill would alter or regulate a payment system that performs so efficiently and effectively that more and more merchants no longer accept checks (Memo Feb. 4).