CUNA urges Congress to oppose interchange legislation

Credit unions urge members of Congress to oppose any legislation affecting the security and efficiency of the interchange system, CUNA Deputy Chief Advocacy Officer Jason Stverak wrote to Congress Monday. Grocers are visiting Washington, D.C., this week and CUNA expects them to push for credit union-opposed interchange legislation, the Credit Card Competition Act.

CUNA, Leagues, and credit unions strongly oppose the legislation, and kept it from moving forward in the last Congress.

“While retailers like the benefits of credit cards – immediate payment, protection from fraud, and often larger purchases by consumers – they don’t like paying the cost of accepting credit cards,” Stverak wrote. “Interchange fees help defray (but do not cover) the cost of fraud detection, credit monitoring, and fraudulent purchase protection that makes consumers and merchants whole when bad actors attack.

“This falsely-named proposal promises more ‘competition” – but would instead benefit big retailers while hurting consumers,” he added. “It would allow retailers to use the cheapest processing option, with no requirement to keep consumers’ data safe or return savings back to them.”

He also cited CUNA research showing 95% of consumers says interchange works well and more than half say it is “excellent.”

“Interchange works. It keeps consumers, merchants and financial institutions safe. Interchange fees support affordable access to credit and the many protections that are currently in place,” Stverak said. “Despite the risk of significant consequences, retail groups want Congress to dismantle the interchange system.”

Stverak also encouraged members of Congress to ask specific questions in response to support for the interchange bill, including the lack of consumer benefits with the Durbin Amendment (which placed similar caps on debit interchange fees).