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Oct. 2, 2013 – NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt refuted a recent study on debit card interchange swipe fees and revealed who really benefited from the reduction in fees imposed under the Dodd-Frank Act's Durbin amendment.

"After two years with the Durbin amendment, retailers are reaping $8 billion in rewards while there is still no proof of any savings being passed along to consumers," Hunt said Tuesday. "In fact, consumer prices have continued to rise despite claims to the contrary. Credit unions – not-for-profit, member-focused financial institutions – continue to struggle to serve their members."

The study was released by the Merchants Payments Coalition on the two-year anniversary of the Durbin amendment, which directed a review and cap on debit card interchange fees paid by merchants to card issuers. Conducted by Sonecon LLC co-founder Robert Shapiro, the study said consumers saved $5.8 billion through lower prices due to the reduction in interchange fees.

Despite a provision to exclude from the cap those institutions with less than $10 billion in assets – the "small institution exemption" – credit unions are still feeling the pinch of this rule. Hunt pointed to data collected in NAFCU's monthly Economic and CU Monitorsurvey, which showed 64 percent of member credit unions with less than $10 billion in assets have experienced a decline in per-transaction interchange fees received since 2011.

Furthermore, the Federal Reserve's 2013 study, "2011 Interchange Fee Revenue, Covered Issuer Costs, and Covered Issuer and Merchant Fraud Losses Related to Debit Card Transactions," also reported decreases in interchange fees from exempt issuers. The study noted a 4 percent decline from the 45-cents-per-transaction average during the first nine months of 2011.

Merchants have sued the Fed over its debit interchange rule, and federal district court Judge Richard Leon on July 31 ruled it invalid. The Fed is appealing that ruling before the U.S. Circuit Court of Appeals. The current rule, which caps debit interchange fees at 21 cents per transaction (plus 1 cent for anti-fraud costs) will remain in effect throughout the appeals process.

Hunt, in Tuesday's statement, picked up by The Hill and Credit Union Times, noted credit unions are considering a variety of measures to recover losses due to the Durbin amendment. How consumers fare will depend on the outcome of the Fed's appeal. "Consumers will be hit with a double whammy if credit unions stop offering many of their low-cost, low-fee services," she warned.