Act by June 20 to protect your Debit Card

We urge you to join us and speak to your Senators and Members of Congress to remove the Interchange amendment from S. 3217, the Restoring American Financial Stability Act.

The “Restoring American Financial Stability Act” (S.3217) was designed to protect consumers, and credit unions do support this effort. However, at the last minute, Senator Richard Durbin (D-IL) added an amendment called the “Durbin-Interchange Fee” amendment. At the time this amendment was added there were NO hearings, NO mark-ups and NO debate which fundamentally goes against the representative process.

What Does This Amendment Mean?

Basically, this amendment allows large retail stores to negotiate with financial institutions for a reduced Interchange fee. This is the fee that merchants are charged for the convenience of providing debit and credit card payment systems to consumers. A portion of this fee is passed through to the financial institution, to help support the cost of issuing debit and credit cards and to alleviate costs of fraudulent transactions. The large retailers say that if the fees are reduced it will allow them to reduce their prices to consumers, but there is no language in the amendment requiring them to do so which essentially allows them to pocket the extra profit.

Who Benefits From This?

This amendment will mainly benefit large retail stores and large financial institutions simply because they have the transaction and debit card volume to negotiate discounts. This will give more power to the “Big Banks” while edging out the smaller banks and credit unions, as well as small businesses, in their ability to compete in this arena.

How Does This Affect You as a Consumer and Member?

Since this amendment allows retailers to negotiate for Interchange Fee discounts, they can essentially choose which debit/credit cards to accept (and even charge a fee if you are not on their “preferred” card list) and which to reject, or to not allow the use of a debit or credit card for transactions under a certain dollar amount.

What Can I Do to Stop This?

You can send a letter to Congress, or even make a phone call. It will take you less than a minute to submit a standard form letter through Connect for the Cause, a non-profit organization looking out for advocacy rights of credit unions and their members.