Dan Berger, the president and CEO of the National Association of Federal Credit Unions, urged Congress on Friday to prepare to act if credit unions and community banks require lawmakers’ help following a federal court ruling on debit interchange.
The ruling issued by a federal district court late last month invalidated nearly all of the Federal Reserve’s interchange regulations. Berger said the ruling is significant for all credit unions because of the loss of debit interchange income and the costs associated with “implementing massive changes” to the existing debit card system.
“It is important to note that Congress provided no exemption for credit unions of any size from the network exclusivity rules,” Berger said in a letter to the House Financial Services and Senate Banking Committees. “This means that all small issuers, including credit unions, will be adversely impacted by this ruling and will now face additional and increased costs that will come from the reworking of this rule.”
Berger said most credit unions lack the resources that allow bigger institutions to cope with extra costs, adding that “it was not the intent of Congress” that small issuers like credit unions “would be so adversely impacted.”
“As you continue to follow the legal developments in this case, we urge you to stand ready to act in a timely manner should our nation’s credit unions and community institutions ultimately need congressional action on this matter,” Berger said.