Corkery: Protecting interchange system means protecting consumers

 Attacks on the interchange system puts Michigan families at risk to benefit big retailers, Michigan Credit Union League President/CEO Patty Corkery wrote in the Detroit News this week. Mischaracterizing interchange fees as a hidden tax ignores the fees’ use toward covering fraud protection, data security, and payments infrastructure costs.

“Think of every grocery run, every gas purchase, every online order. Interchange is what ensures those payments can be processed instantly, securely and in ways that protect both consumers and merchants when fraud occurs,” Corkery wrote, adding “without it, the very services that make card payments safe and convenient would be at risk.”

It’s a Main Street issue, Corkery adds, because it impacts the ability of credit unions and other local financial institutions to continue providing safe and affordable services. The ongoing fight against the Illinois Interchange Fee Prohibition Act shows what’s at stake, while 15 years of data from the Durbin Amendment’s debit interchange fee cap shows less than 1% of retailers lowered their prices, while 22% raised them.

“Michigan families deserve better. We need policies that protect consumers, support small businesses and strengthen local financial institutions,” she wrote. “Gutting interchange does the opposite. It weakens payment security, undermines community lenders and shifts the costs of security and data protection onto families and small businesses that can least afford them.”

Read the op-ed