WASHINGTON–Just to what degree will the Federal Reserve listen to credit unions and banks when it comes to their objection to its Reg II proposal, which reduces interchange rates?
It's a question to which the answer is often driven by the political make-up of the Fed’s board, according to America’s Credit Unions.
As CUToday.info reported, America’s Credit Unions joined with other trade group in a letter telling the Federal Reserve its proposal would harm consumers, banks and credit unions and would violate the law by prohibiting banks from recovering the costs they incur in providing affordable, safe debit card programs and a reasonable return on that business.
“The proposal would benefit large retailers like Walmart and Amazon at the expense of consumers and financial institutions of all sizes,” the groups stated.
‘Varied Response’
In response to a question from CUToday.info, Carrie Hunt, chief advocacy officer with America’s Credit Unions, said her experiences with the Federal Reserve when it comes to acting on input and feedback has been “varied.”
“From my perspective, it really does depend on the makeup of the Federal Reserve board in terms of the impact of the staff level,” Hunt said. “There are times the opinion of the board can be more markedly different than the staff depending on that makeup. It really does depend on the political dynamic of the board, not necessarily some of the work that the staff does in terms of putting these proposals together.”
Moving in Wrong Direction
During a call with media Hunt said the issue isn’t so much the reduced size of the interchange fee cap the Fed is proposing as much as it is it shouldn’t be reduced at all.
“We think this should be going in the opposite direction,” said Hunt. “They are not looking at the right data on this rulemaking.”
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