Credit unions relay fraud risks, CBDC, interchange opposition as Fed’s Powell testifies

Federal Reserve Chairman Jerome Powell presented the Fed’s Semi-Annual Monetary Policy Report before the House Financial Services Committee Tuesday. Powell noted the unemployment rate remains low, with the labor market at or near maximum employment, and inflation has come down a great deal but “has been running somewhat above our 2 percent longer-run objective.”  

In advance of the hearing, America’s Credit Unions President/CEO Jim Nussle reiterated strong opposition for the Federal Reserve Board’s proposed amendments to Regulation II and any reduction in the debit interchange fee cap. 

Nussle also relayed America’s Credit Unions’ commitment to fighting fraud and improving credit union members’ resilience to scams, noting a recommendation that the Board “explore tools and solutions that can help credit union FedNow participants manage the unique risks associated with instant payments.” 

He conveyed support for a framework for regulating digital assets that accommodate responsible innovation within the credit union industry but also expressed opposition to the creation of a central bank digital currency (CBDC). America’s Credit Unions supports efforts to prohibit a CBDC, such as the Anti-CBDC Surveillance State Act that has been proposed in the House. 

Nussle outlined similar priorities ahead of Powell’s appearance before the Senate Banking Committee today, which is slated to begin at 10:00 a.m. Eastern.