The enemy of my enemy is my friend, according to the Banking and Credit Union industries...
by Ron Daly
While sipping my morning cup of joe and watching the news, I came across this commerical (embedded below, or watch on YouTube here.):
Two things that struck me about this:
- Are moms that unpack groceries the only people affected by anything anymore? I've seen a dozen commercials with that main character.
Now, here's the other, more important thing...
- Did you catch who was sponsoring that commercial?
That's right, it was the ABA, CUNA, and NAFCU all working together to...
Wait, ABA and CUNA and NAFCU?!? Working TOGETHER?
Yes, it seems these bitter rivals are putting aside their differences to attack changes to debit card laws and interchange. They know that banks and credit unions alike will be harmed by changes to interchange, as evidenced by this NAFCU story:
The survey, for the February issue of NAFCU’s Economic & CU Issues Monitor (formerly the Flash Report), showed that debit interchange fees made up one-fifth of respondent credit unions’ non-interest income last year. The Dodd-Frank Act provision calls on the Federal Reserve to set a “reasonable, proportional” fee on debit transactions. The Fed has a proposal out that would place this fee from 7 cents to 12 cents, which would cut credit unions’ interchange fee income by as much as 80 percent.
Despite the law’s small-issuer exemption, there is nothing to prevent card networks from applying this low fee to all issuers regardless of asset size. Of NAFCU’s survey respondents, 75.4 percent said they have reviewed or will review their business plans for other ways to pay for fraud, data security and other costs associated with providing debit card services.
As much as 80% of income cut? That's rough. No wonder NAFCU and CUNA have put down the cudgels and started shaking hands. What's the old proverb?
"Me against my brother.
Me and my brother against my cousin.
Me, my brother and my cousin agains the outsider."
Or something to that effect. And if NAFCU and CUNA teaming up doesn't surprise and stun you, certainly their pairing with ABA should. And the whole group of them have joined with Visa and MasterCard and countless other groups and businesses to get the word out about interchange and how, eventually, it will do more harm to consumers.
Next thing you know, my dogs and my neighbors cat will join forces and start demanding more treats.
Is this video (or any of the other resources available on the Electronic Payments Coalition website) something you want to put in front of members via your website? Feel free to pay them a visit and see if there's something there you want to use to spread the word.
[Special thanks to Keith Leggett's blog for embedding the commercial we were searching for this morning.]