(From CUNA) – On Friday, August 5, CUNA, AACUL, and all of the state credit union leagues joined the American Bankers Association and their state associations in writing to Congressional leadership in strong, unified opposition to the changes to the interchange process. The letter emphasizes the negative impacts this bill would have on consumers, small businesses, and financial institutions.
The Marshall-Durbin bill purports to provide merchants a choice of which networks credit card transactions are processed across. But this dual-routing technology does not exist today and for good reason. A credit card transaction is an extension of the bank or credit union’s own funds to its cardholder, who directs those newly lent funds to a merchant. It makes perfect sense that the bank and credit union that lends these funds should carefully and deliberately select the network over which their own funds flow to the merchant. Unlike merchants that specialize in selling groceries or shoes, financial institutions are payments experts responsible for and best positioned to protect their customers against fraud, loss of private data, and the inefficiencies of unreliable systems. Financial institutions are also examined for compliance with privacy, data security, and fair lending laws, while merchants are not.
CUNA has issued an action alert in response to the legislation, calling on credit unions to share their concerns with the interchange bill.