Updated: 10:41 a.m.
As the conference committee on financial regulatory legislation nears the end of its negotiations, K Street is already starting to weigh in against the final product.
The two major credit union trade groups, the National Association of Federal Credit Unions and the Credit Union National Association, are both urging lawmakers to oppose the bill after unsuccessfully lobbying to get a so-called interchange amendment removed from it.
“We have worked with Congress over the last year in an attempt to minimize the adverse impact that this legislation will have on credit unions and their members, while at the same time recognizing that consumers of financial products, especially those provided by currently unregulated entities, need greater protection,” CUNA President Dan Mica wrote lawmakers Wednesday. “Without the interchange provisions, the bill strikes a careful balance in protecting consumers while providing meaningful financial reform.”
“However, the debit interchange provision, in its current form, would cause credit unions, and their members, considerable harm and as a result, we believe this provision — included without any study of its impact, hearing or comprehensive debate — upsets the carefully constructed balance that the bill has achieved as it has progressed through the legislative process,” he added.
CUNA’s move to officially ask lawmakers to vote against the bill comes a day after the NAFCU made the same recommendation.
“The adoption of this amendment is a clear vote for big box retailers, enriching them at the expense of consumers and smaller financial institutions who continue to recover from the Great Recession created by Wall Street,” NAFCU President Fred Becker said in a statement Tuesday. “Furthermore, credit unions have been widely recognized for their sound and consumer-friendly practices. So it seems quite unjustified to penalize credit unions and the 92 million members they serve through the additional regulatory burden this legislation will create through the oversight of the Consumer Financial Protection Bureau.”
Credit unions, along with community banks and credit card companies, have been among the most vocal lobbying groups against the interchange fee. Meanwhile, merchants and retailers have been lobbying heavily in support of the amendment by Sen. Dick Durbin (D-Ill.).
The final language, which was a compromise reached in conference, requires the fees be regulated and reasonable. However, language was removed that would have allowed merchants to offer a discount to customers using certain cards with lower transaction fees. The compromise also allows merchants to decide which network to use to process transactions, whereas contracts now prevent retailers from using companies that have only the lowest fees.
So far, the interchange amendment doesn’t appear to be swaying lawmakers from voting in favor of the bill.
Rep. Debbie Wasserman Schultz (D-Fla.), who had written a letter to the conferees noting her opposition to the amendment, said she is OK with the compromise language.
“While this compromise is not perfect, it is a step in the right direction and allows us to move forward on the important reforms of the financial industry included in the broader legislation,” Wasserman Schultz said in a statement.