Interchange Fees and Credit Unions - Members Taking Action

by Ron Daly 

Interchange fees are the topic of many blog posts in the industry these days. Some posts are for changes, some are against, some are matter-of-fact and some are downright angry. One alarming article released yesterday says that 90% of yearly interchange revenue could be lost, which comes down to "$15 to $35 per debit card per year". 

CUNA has been pressing the issue in its daily News Now emails. Today's story deals with the Treasury and what Dan Mica called the "most serious threat" facing CUs at this moment in history. But it was a different story (and a different reaction by our company's clients) that caught my attention. 

Read this excerpt from the News Now article, "Grassroots interchange opposition, strong and growing":

WASHINGTON (6/2/10)--While the halls of Congress have emptied for the week, grassroots credit union advocacy regarding interchange legislation continues this week through both legislator-led town hall meetings and credit union activism on several fronts.

One of those fronts is a Credit Union National Association-backed effort to verbally and electronically reach out to representatives, and this communication effort resulted in over 80,000 individual contacts as of Tuesday.

CUNA is asking credit union backers to urge their legislators to oppose federal intervention into the current interchange rules. An amendment offered by Sen. Richard Durbin (D-Ill.) which was successfully added to the Senate's regulatory reform package would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions. CUNA has recently said that this rule change forces the Fed into the role of a price-fixing body, when interchange fees should be driven by market forces.

State credit union leagues have also chipped in to back credit union concerns, and Virginia- and Louisiana-based credit union leagues are among those that have joined state-level small banking associations to publicly oppose federal interchange intervention.

Some examples of emails sent to members, compelling them to call and email their leaders and take action: 

From Horizons North Credit Union: 

 

From Shell Federal Credit Union: 

 

From Belvoir FCU : 

 

They're simple emails with a simple message: "Interchange is going to hurt the credit union. Contact your leaders now and tell them to act in our mutual best interest."

What does it cost you to send an email to your members? Hopefully, the answer is "not much". How much will interchange fee changes hurt your CU? The answer is probably "a lot". Risk versus reward, people. Members need to know about things like this and when it comes to asking them to do something as simple as sending an email, that's only about three minutes of their time. Never hurts to ask, right?

So, here's your million-dollar-question-of-the-week: What's your credit union doing to encourage calls and letters to legislators from members? Tell us about it in the comment section.