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Respondents to NAFCU's latest survey of member credit unions said the Dodd-Frank Act's debit card interchange provision will have an average, negative bottom-line impact of 35 basis points.

The survey, for the February issue of NAFCU's Economic & CU Issues Monitor (formerly the Flash Report), showed that debit interchange fees made up one-fifth of respondent credit unions' non-interest income last year. The Dodd-Frank Act provision calls on the Federal Reserve to set a "reasonable, proportional" fee on debit transactions. The Fed has a proposal out that would place this fee from 7 cents to 12 cents, which would cut credit unions' interchange fee income by as much as 80 percent.

Despite the law's small-issuer exemption, there is nothing to prevent card networks from applying this low fee to all issuers regardless of asset size. Of NAFCU's survey respondents, 75.4 percent said they have reviewed or will review their business plans for other ways to pay for fraud, data security and other costs associated with providing debit card services.

Most respondents, or 98.3 percent, said they plan to continue their debit card programs. However, nearly 48.3 percent said they are considering the elimination of free checking, and 45.8 percent said they are considering charging members an annual or monthly fee for debit card access.

Additionally, 43.8 percent said they could be forced to eliminate or reduce rewards programs.