Member 5605
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OSU Federal said:We need your help. Contact Congress today.
It is extremely important to inform you about an issue that could negatively impact the members of OSU Federal as well as other credit unions across the country.
There is pending federal legislation that could affect the system that processes credit and debit card payments.
Each time you use your OSU Federal Visa® debit or credit card, a merchant is paid immediately and your credit union receives what is described as interchange through the card payment processing system. This complex interchange system reflects a merchants fair share of the costs (usually pennies on the dollar) of this convenient and beneficial payment system. It provides you with the ease of a credit or debit card and enables the merchant to instantly receive payment for your purchase without having to handle cash or wait for a check to clear.
At OSU Federal, we receive one-third of the interchange fee paid by the merchant, and we use this to:
* Help keep our cards free of, or with low, annual fees
* Pay for the cost of fraud and instantly issuing your OSU Federal replacement card in the event of card breaches.
The U.S. Senate recently passed S. 3217, Restoring American Financial Stability Act, and the entire Congress is now considering the bill. Current amendments to the bill would be harmful to credit unions and consumers alike. While we recognize the need and we support financial reform, this specific provision which has nothing to do with financial reform and has had no hearings, no debate, and no input would reduce the amount of interchange fees paid by retailers and threaten our ability to offer debit and credit cards. This amendment is not good for consumers in the end.
The current bill and its concerning amendment is in front of the legislature now and slated for a possible vote soon. We encourage you to send a message today to your Congressional Representatives and Senators urging them to make this important issue more transparent with hearings and needed debate. Ask them to oppose any legislative changes to the interchange system which would affect debit and credit card-issuing credit unions and the card payment system until such hearings and debate can take place.
To simplify voicing your opinion, the Credit Union National Association (CUNA) has provided an online tool that helps you send a message to your federal legislators in a matter of a few minutes. Click here to send a message to your federal legislators today.
So I decided to use the link at the bottom:
http://capwiz.com/cuna/issues/alert/?alertid=15068616&PROCESS=Take+Action
As a member/owner of a credit union I really appreciate the small things that they do vs a money hungry bank.
I used the well worded form letter and I agree with all of the items so I put them all in.
As a constituent and a credit union member, I am writing to urge you to oppose inclusion of the Senate-passed interchange provision in the final financial reform bill. This provision will have unintended consequences for credit union members like me and every consumer with a debit card in his or her wallet. It has not been thoroughly studied and does not belong in this bill.
Merchants receive tremendous benefits when they choose to accept debit and credit cards as a form of payment. They are paid immediately, and they do not have to deal with cash or wait for a check to clear. Like electricity or rent, the interchange fee that the merchant pays is a cost of doing business. Government rate controls on interchange reduce the merchants responsibility to pay for the benefits received from the card payment system and will drive up costs for credit unions and their members.
My credit union incurs significant expenses in operating its card payment system. For example, my credit union is responsible for administration of card programs, call centers, and reissuing cards in cases of merchant fraud. Interchange supports these costs. If interchange fees were reduced, my credit union and other small financial institutions would be forced to raise rates and fees for card services. My credit union might even have to curtail debit and credit card services for members, and that might force me to move my account to a big bank that offers cards at a higher price. Furthermore, there is no evidence to suggest that merchants would pass along any savings resulting from lower interchange to consumers.
This provision offers no real exemption or carve-out for credit unions; if it were included, merchants and big banks would set rates that would make it impossible for my credit union to compete. In the end, merchants could refuse to accept the credit union debit card I rely on for everyday purchases.
The interchange provision requires a more thorough review and does not belong in this bill. I urge you to oppose its inclusion in the final financial reform bill and hope you will ask conferees to keep this provision out of this bill.
I figured it would go un-noticed and that would be that.
Well today I got an email. (form letter)
Jeffrey A. Merkley said:Dear ******,
Thank you for contacting me with your concerns about regulating interchange fees on electronic debit card transactions. While I understand we may not agree, I appreciate the opportunity to share my perspective on why I supported this provision.
As you know, during the Senate debate on Wall Street reform legislation, Senator Dick Durbin (D-IL) offered an amendment to reform the "swipe charges" businesses pay when customers use debit cards. The amendment would give the Federal Reserve Board authority to ensure that debit transactions are priced more like the checks they functionally replace, which banks process without significant additional cost to the merchant.
Swipe fees now represent one of the highest operating costs for many small businesses in Oregon, and this cost has been rising significantly over the past few years. Certainly, firms should be appropriately compensated for operating these vital networks, which provide consumers with a safe and reliable payment method. However, I also believe that federal oversight of these processing fees is appropriate. The fact that Visa's debt card interchange fees in Europe are significantly lower than those charged to American retailers suggests that there is room in the marketplace for lower rates. Please know that the amendment would not permit discrimination based on card issuer and includes special accommodations for smaller banks and credit unions.
This provision was not included in the version of the legislation passed by the House of Representatives, and members of the Senate and House are now working to resolve differences between their two bills. Should the language on interchange debit fees be included in the final version of the Wall Street reform legislation, the Federal Reserve Board would be required to consider a range of market factors and hear all sides before writing any new rules. I understand that community banks and credit unions are very concerned about any changes to the interchange system, and I am committed to working with all involved parties to ensure any changes would not be unduly burdensome on any issuers.
Thank you, again, for sharing your thoughts with me. I hope you will continue to keep me informed about the issues that matter most to you.
Sincerely,
Jeffrey A. Merkley
United States Senator
I find their basis for it being "one of the highest operating costs.." nope, actually for small business it's carrying liability insurance. Paying workers comp insurance which for every dollar you pay in wages you pay ANOTHER $.35 to $.50 to cover that worker.
$.01 on the dollar if that for the use of a debit/credit card is rediculious that they want to lower that.
Your a store owner. You charged up $20 in sales. What's $.20 or even $.15.
