|| NAFCU's Alexis Latifi, Sarah Loats Zimmermann
and Tessema Tefferi took to the phones Tuesday
to urge member CEOs to call their U.S. senators
for support of the Tester-Corker amendment #392.
– NAFCU photos
June 8, 2011 – NAFCU President Fred Becker yesterday urged Senate leaders to vote “yes” on an amendment coming up for action today that would provide a 12-month delay in the Federal Reserve’s debit interchange fee-cap rule, and he called on credit unions to help persuade their own senators to do the same.
Becker, writing as senators were debating the issue, told Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., that Senate Amendment #392 presents a “common-sense” approach to the debit interchange fee issue.
“To be clear, despite what opponents of this amendment want you to believe, this is not a big bank issue,” the NAFCU president wrote the Senate leaders. “This is an issue about consumers and the community institutions, such as credit unions, that serve them in your state. . . this issue is a KEY VOTE for your credit union constituency.”
Senate Amendment 392 represents a second effort at compromise by Sens. Jon Tester, D-Mont., and Bob Corker, R-Tenn., to reduce the debit rule delay contained in S. 575 in an effort to win enough support for passage. Both lawmakers took to the Senate floor Tuesday, arguing that the Fed’s proposed 12-cent cap on debit interchange fees falls far short of the costs to financial institutions of providing debit-card services.
Sen. Richard Durbin, D-Ill., who won the debit interchange language in last year’s Dodd-Frank Act, argued that debit card issuers will be fairly compensated under a 12-cent cap. But both Tester and Corker said some retailers have told them personally that they do not believe the proposed cap is reasonable or sustainable.
Senate Amendment 392 was offered for inclusion in an economic development measure (S. 792) introduced by Sen. Barbara Boxer, D-Calif. A vote is set for 2 p.m. today. The revised delay is also backed by Sens. Mike Crapo, R-Idaho, Michael Bennet, D-Colo., and Kay Hagan, D-N.C.
As offered Tuesday, Senate Amendment 392 would:
- delay the scheduled July 21 implementation of the proposed Federal Reserve price-cap rule;
- require a study within six months by the Federal Reserve and other regulators (including NCUA) on the impact of the proposed rule;
- require the Fed to write a new rule if it and one other regulator finds problems with the law;
- allow the Fed, in rewriting the rule, to consider all costs associated with a debit card program and require it to issue the final rule within six months after the study.
After two years, and once every two years, the Federal Reserve would be required to review the effectiveness of the small-issuer “exemption” in the marketplace and make suggestions to Congress on ways to improve it if needed.
Becker e-mailed NAFCU members Tuesday urging them to call their senators and urge them to “vote yes” on Senate Amendment #392. Becker and the NAFCU staff also took to the phones to contact credit union CEOs and seek their aid in pushing for action.
To call senators, dial the U.S. Capitol switchboard at 202-224-3121.