League Engages With Senators on Interchange, Overdraft; Urges Lawmakers to Leave Current Systems in Place
Your League closely monitored two key Congressional hearings last week covering interchange and overdraft protection programs, while also joining with our credit unions and other financial services trades in writing Congress about the dangers and unintended consequences of altering the current regulatory models governing interchange and overdraft programs.
The Dodd-Frank Act of 2010 set federal price caps on debit card interchange fees. Now merchants and their trade groups are asking lawmakers to expand price caps to credit cards. Your League is adamantly opposed to any such move, noting interchange fees allow financial institutions to cover some costs associated with offering low-cost lines of credit, state-of-the-art fraud protection and reward programs. Changes to interchange fees on credit cards would lead to credit union members and other consumers losing out on security, card benefits and savings.
Your League is also fighting any regulatory change to the current overdraft program model. Our communications to lawmakers note that overdraft programs are already regulated, which includes a required opt-in feature. We worry that any new regulation or government intervention related to overdraft programs runs the risk of restricting consumer access to this important service, which might well drive those in need to less regulated entities, such as payday lenders.
“Credit unions pride themselves in offering products and services their members need and want, which includes overdraft protection services and credit card programs with advanced security protections and innovative benefits," notes Virginia Credit Union League President/CEO Carrie Hunt. "Virginia’s credit unions stand united in opposition to any federal or state legislation or regulation which restricts credit unions’ ability to provide safe and fair services to their members.”
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