Newsroom
NAFCU advocates against extending Durbin Amendment, other efforts that could harm CUs
As various options to address the economic and health concerns of the coronavirus are considered by lawmakers in emergency aid packages, NAFCU is advocating against all that could harm the credit union industry. Of note, the association is currently pushing back against attempts from some trade groups to extend the Durbin Amendment of the Dodd-Frank Act – which places a price cap on interchange fees on debit card transactions – to credit cards.
"Proponents of the harmful Durbin Amendment are once again looking to pull the wool over consumers' eyes while our nation is fighting a national pandemic by advocating to expand this failed policy," said NAFCU President and CEO Dan Berger in response to these efforts. "In the aftermath of the 2008 financial crisis, the Durbin Amendment passed with almost no debate or study while its proponents promised consumers billions of dollars in savings via lower prices through a government-sponsored price control on interchange fees. However, these savings never found their way into consumers’ wallets.
"Instead, the savings ended up in retailers' and merchants’ coffers while consumers also saw fewer free checking options and the elimination of debit reward programs. If history is any lesson, the COVID-19 pandemic is no time to be expanding the failed policies of the past, and it is imperative Congress reject expanding this anti-consumer policy," Berger argued.
NAFCU has long urged for a repeal of the Durbin Amendment, arguing that merchants have not passed the benefits on to consumers while retail prices keep rising. Although the amendment sought to exempt smaller institutions from the fees, the price control put in place by Congress has trickled down to also affect credit unions under $10 billion in assets.
NAFCU will fight against efforts that would extend the Durbin Amendment and will continue to call for its repeal.
Another issue the association is engaged on is one to alter credit reporting procedures that could negatively impact lenders' operations.
In a letter to congressional leadership, NAFCU and several other financial trade groups advised against "a blanket suppression of all adverse information in credit reports." The groups noted that lenders use certain credit codes in times of natural disasters "to ensure delinquent or missed payments resulting from the economic impact of coronavirus do not adversely impact individuals' credit" and confirmed that this coding does not harm credit scores.
"While suppression is well intended, it could undermine safety and soundness," they wrote.
NAFCU will keep credit unions updated of any provisions that could negatively impact their business and members.