Rep. Blaine Luetkemeyer, R-Mo., introduced the Secure Payments Act (H.R. 7531), which would stop finalization of the Federal Reserve’s proposed debit interchange proposal. Credit unions strongly oppose the Fed’s proposal, and the introduction comes as nearly 6,000 credit union advocates are in Washington, D.C., for the 2024 Governmental Affairs Conference.
The Fed’s proposal would make changes to update all three components of Regulation II’s interchange fee cap based on the latest data reported to the Board by large debit card issuers. H.R. 7531 would stop implementation until a study assessing the proposal’s impact on consumers’ access to low-cost or free checking accounts, fraud prevention, and merchants’ costs of accepting debit cards can be conducted.
It would also require a quantitative impact analysis on the proposal’s impact on small depository institutions and the availability of debit and banking products to low-income communities.
“Credit unions need access to as many resources as possible to provide critical services in rural and underserved communities across America, and we’ve already seen that debit interchange restrictions limit those resources and ultimately hurt consumers,” said America’s Credit Unions President/CEO Jim Nussle. “The Federal Reserve’s proposal to reform all three components of the Regulation II interchange fee cap deserves a study to fully understand its potential consequences.
“Congressman Luetkemeyer has been a fierce partner in this fight and we thank him for introducing a commonsense piece of legislation that will bring real time data and evidence to the Federal Reserve’s effort. America’s Credit Unions looks forward to supporting policies that allow people to live their best financial lives.”
“A stop-and-study bill is a favorable outcome for credit unions at this juncture because there is so much credible, strong evidence that not only does the current interchange system work, but also consumers and credit unions have nothing to gain from changes to the system,” said Jim Phelps, EVP and chief advocacy officer at the Cornerstone League. “While the stop and study bill is in response to the Fed’s proposal on debit interchange, this development will shine a light on the fact that small businesses will not benefit from the Credit Card Competition Act — only the big box retailers.”
