WASHINGTON—With the nation’s grocers in Washington this week for their meetings, CUNA is urging members of Congress to oppose any legislation affecting the “security and efficiency” of the interchange system, a reference to Credit Card Competition Act, which is expected to be introduced as early as today. The DCUC has also registered its opposition.
Grocers, along with the nation’s other retailers, are strong proponents of the bill, which is just as strongly opposed by credit unions.
“While retailers like the benefits of credit cards – immediate payment, protection from fraud, and often larger purchases by consumers – they don’t like paying the cost of accepting credit cards,” Deputy Chief Advocacy Officer Jason Stverak said in a letter sent to the Hill. “Interchange fees help defray (but do not cover) the cost of fraud detection, credit monitoring, and fraudulent purchase protection that makes consumers and merchants whole when bad actors attack.”
“This falsely-named proposal promises more ‘competition” – but would instead benefit big retailers while hurting consumers,” the letter continues. “It would allow retailers to use the cheapest processing option, with no requirement to keep consumers’ data safe or return savings back to them.”
Stverak pointed to CUNA research showing 95% of consumers says interchange works well and more than half say it is “excellent.”
‘Interchange Works’
“Interchange works. It keeps consumers, merchants and financial institutions safe. Interchange fees support affordable access to credit and the many protections that are currently in place,” Stverak said. “Despite the risk of significant consequences, retail groups want Congress to dismantle the interchange system.”
Stverak also encouraged members of Congress to ask specific questions in response to support for the interchange bill, including the lack of consumer benefits with the Durbin Amendment, which placed similar caps on debit interchange fees.
Affecting Defense CUs
In a letter to the Hill, the Defense Credit Union Council has also registered its opposition to the legislation.
“Opposing this legislation on behalf of consumers is very important for DCUC and its member credit unions. We’ve seen retailers misdirect Congress before with the 2010 Durbin Amendment on Debit Interchange which never passed any savings onto the consumer,” said Anthony Hernandez, DCUC president/CEO. “This fact needs to be amplified along with other long-term negative consequences as Senators and Representatives consider whether supporting this legislation is worth the damage and lack of cyber security caused by routing credit card transactions to the cheapest network. I am very happy to work with CUNA and NAFCU on presenting a united front on behalf of the entire industry which is composed of 135 million members.”
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