Oct. 3, 2012 – Speaking at the 2012 PULSE Conference in Las Vegas on Monday, NAFCU President and CEO Fred Becker pointed out that the debit interchange fee cap has not resulted in any savings for consumers and only reinforced the association’s view that the government should not set prices.
|NAFCU President and CEO Fred Becker tells PULSE attendees that the debit rule has had a negative impact on credit unions.
Becker was participating in a panel discussion, “Insights & Solutions Forum: Capturing Opportunities – Strategies to Prosper in a Post-Durbin Environment.” He discussed findings from NAFCU’s September Economic and CU Monitor survey which show that many NAFCU-member credit unions have seen a decrease in interchange revenue this year. All of these credit unions, Becker noted, have assets below the $10 billion threshold where the cap exemption is set.
PULSE’s own findings on interchange also appear to indicate the fee cap did not have the intended effect. The group’s 2012 Debit Issuer Study found that the cap on interchange rates has “significantly reduced debit revenue,” with the average interchange rate for regulated issuers declining by 55 percent for signature transactions and 28 percent for PIN transactions.
The PULSE study also found that:
- some ‘exempt’ institutions have also seen a decline in interchange revenue;
- business debit transactions, one of the key growth areas for issuers in prior years, are now unprofitable on a per-transaction basis for some issuers;
- half of all regulated issuers with a rewards program ended their program in the last year and another 18 percent plan to end or restructure their programs in 2012;
For the study, PULSE surveyed 57 financial institutions, including credit unions, large banks and community banks. PULSE says the participants collectively issue 87 million debit cards and operate 47,000 ATMs. More information about the study can be found on the PULSE website.