WASHINGTON—It’s critical the Senate Banking Committee understand the “immense pressure” credit unions are under in terms of compliance and operational challenges, America’s Credit Unions wrote to the Senate Banking Committee in advance of Federal Reserve Chair Jerome Powell’s testimony this week.
Powell testified before both the House and Senate.
“Regulation II has caused significant real-world economic harm to credit unions and their members—and its recent proposed expansion by the Board is only compounding that harm. The Durbin Amendment’s ‘exemption’ of smaller financial institutions has proven to be largely illusory, as the Federal Reserve’s own data shows that regulatory thresholds in the interchange market do not insulate smaller issuers from harm,” wrote ACU President and CEO Jim Nussle. “Specifically, Reg II data indicates that the average per transaction interchange fee for exempt single-message transactions has fallen by nearly 31% in inflation-adjusted dollars from 2011 to 2021.”
America’s Credit Unions told Congress it supports a bill from Rep. Blaine Luetkemeyer (R-MO) that would halt implementation of the rule until its impact can be studied.
Additional Points
The letter to the Senate Banking Committee also expressed opposition to:
- Creation of a central bank digital currency (CBDC), which would represent, “a fundamental transformation of banking and payments and poses serious risks to consumers and the financial system.”
- The Federal Reserve’s Overnight Reverse Repo Facility, a form of “subsidization for uninsured depositors allows money market funds to offer higher rates than the market would ordinarily support and continues to place pressure on credit union liquidity.”
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