Interchange challenges affect access to credit, consumer security

Fighting against big box retailer-supported changes to the electronic payments system is a top credit union priority, and a recent America’s Credit Unions Blog post explains why it is so important to protect interchange.

While multiple state legislatures have introduced interchange bills in recent years, the Illinois Interchange Fee Prohibition Act (IFPA) was the first and only one to pass on the state level to date. The Illinois governor recently signed a one-year delay in implementing the IFPA, giving more time for legal challenges to play out.  

“These proposed changes would unnecessarily upend an effective and efficient card payments system with uncertainty and reduced access to credit for millions of Americans,” the blog notes.

Many studies have confirmed what credit unions have said since Congress added the Durbin Amendment to the Dodd-Frank Act: cutting interchange income and upending the electronic payments system leads to reduced access to credit, especially in smaller communities and low-income households, and threatens consumer data security.

While credit unions successfully kept interchange language out of recent stablecoin legislation, these state interchange threats and likely Big Box Bailout bill reintroduction this Congress remains a big concern.  

Other recent blog entries examine other issues of concern, including:

• The consequences of Australia’s repeal of the credit union tax status in 1994, and
• How changes in student loan payment collections could impact credit union members.

Check out the complete America’s Credit Unions Blog archive and subscribe to the Industry Update newsletter here.