WASHINGTON–CUNA and NAFCU have joined with the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Electronic Payments Coalition, and Independent Community Bankers of America in sending a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy with a “warning” over the card interchange before the House.
The letter states the legislation, introduced by Reps. Lance Gooden (R-TX) and Peter Welch (D-VT), would reduce access to credit, increase security risks associated with credit card use, and limit credit card rewards programs.
“Quite simply, credit cards make life work. Consumers have come to rely on their credit card of choice to pay for gas, groceries, and unexpected emergencies. This is especially true as consumers leverage their credit card rewards to deal with rising costs,” the eight organizations wrote in the letter. “It’s disappointing that the Gooden-Welch bill prioritizes big box retailers’ profits over consumers at a time when consumers can least afford it. The Gooden-Welch bill would allow merchants to choose the cheapest routing networks – which may not offer the same robust security as trusted, established payment networks. This creates additional risks for financial services providers that are extending credit to consumers for everyday purchases, big and small.
‘Important Distinction’
“That’s an important distinction that retailers are trying to overlook; financial institutions cover the costs for replacement cards and fraudulent purchases, making them more sensitive to changes in the payments system than merchants,” the letter continues.
“We are particularly concerned that changes to the current routing system would disproportionately harm credit unions and community banks that serve underbanked areas,” the organizations said. “We’ve witnessed how the 2010 Durbin Amendment, which was adopted as part of the Dodd-Frank Act, capped debit card fees, leading to a decrease in free checking accounts and low-cost banking services for consumers. We are determined not to repeat the past – and, as such, we oppose the Gooden-Welch bill.”
NAFCU Joins With Other Groups in Letter to FTC
Separately, NAFCU has joined with several trade organizations in urging the Federal Trade Commission (FTC) to extend the deadline for filing comments to its advance notice of proposed rulemaking (ANPR) on the prevalence of commercial surveillance and lax data security acts and practices that harm consumers.
The group requested a 60-day extension for the comment deadline to Dec. 20 from Oct. 21.
“The ANPR seeks to develop a record to establish a rule that would fundamentally alter the modern economy,” wrote the group. “As such, the FTC should base the development of a proposed rule on the highest quality and most complete record possible.”
The agency is seeking public comment related to commercial data collection and use practices, asking for input on whether it should implement new regulations to prevent or deter related consumer harms. Though the NCUA oversees federal credit unions’ compliance with the Gramm-Leach-Bliley Act’s (GLBA) robust data privacy and data security standards, the FTC oversees GLBA compliance at state-chartered credit unions that are not federally insured.
‘More Time is Required’
“More time is required for all stakeholders, including the undersigned organizations, to provide the detailed comments and information that the FTC is requesting, including comments on the various economic impacts of a potential regulation, the multiple alternatives available to the FTC, and the significant (and potentially negative) downstream impacts of sweeping regulations on commercial data practices for consumers, businesses, and the American economy as a whole,” concluded the group.
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