American Family Voices: wrong on Interchange

American Family Voices doesn't know quack

We got a funny fax the other day from American Family Voices, a lobby group that’s looking to enact Interchange reforms that could hurt our debit card program.

Here’s the fax. Pretty goofy, right? So goofy that it relies on that ol’ banker trick of trying to paint credit unions as do-gooder banks. AFV is trying to do two things at once: dig up the outdated banker argument, and – at the same time – spin it to fit their Interchange views.

It’s a bunch of quack. Here’s the full text of the fax we got:

If it walks like a bank, talks like a bank, and quacks like a bank… it should be TAXED like a bank.

In 1934, Congress gave not-for-profit credit unions tax-exempt status due to their unique role as lenders of last resort for the poor and underserved.

But today, credit unions comprise a $680 billion industry. This is not your grandfather’s credit union.

So why are these not-for-profit credit unions crying wolf about common sense interchange swipe fee reform?

Credit unions are carrying the water for credit card giants VISA and MasterCard— and the big Wall Street banks that helped cause the financial crisis.

It’s about protecting profits.

Interchange fees cost small businesses and consumers $48 billion every year.

If credit unions want to play with the big boys—and share in their profits—then Congress should tax them like banks.

Today, American Family Voices took out an ad in Politico to tell Congress that credit unions should no longer receive special treatment… and to make sure to pass the Durbin Swipe Fee amendment into law.

We’ve already made our position on Interchange clear, and we can argue about the merits of that all day long. But tying us together with the “big Wall Street banks that helped cause the financial crisis”?

I don’t think so.

Credit unions are tax-exempt because we’re member-owned, we have a volunteer board of directors, and we still serve the underserved. We don’t take the money we make and give it to stockholders or investment groups; we give it back to our members.

AFV claims that “credit unions comprise a $680 billion industry. This is not your grandfather’s credit union.” Well of course not – is growth a bad thing? Credit unions have grown partly due to customers’ disgust with big banks, but our industry is still dwarfed by the for-profit banking industry.

There’s nothing “common sense” about the Interchange reform that lobbyists like AFV are calling for. It’s not going to lower costs for consumers, and it may end up costing them more due to changes in debit card policies if this thing goes through.

Running a debit card program costs money, and Interchange helps credit unions like us pay for the system. You don’t get your electricity for free; you have to pay a power company to deliver that electricity to your home because the delivery costs money. Same with card programs. We hire in-house service employees to help you with your American 1 card questions, and we use Interchange to help pay their salary. And provide security. And provide convenience and a no-annual-fee debit card. Debit card programs don’t run themselves.

Groups like AFV, however, say that we make too much off Interchange fees, and that Interchange fees should only pay for the transmission of the account information. But that’s like paying for just the electrons that cross the power lines. What if a power line goes down? What if a transistor explodes? What if your entire town loses power? Who pays for that?

The only water we’re carrying is for our members. Visa and MasterCard can take care of themselves, and certainly Wall Street big banks can flex their own political muscles. We don’t need or want to help them. American 1 looks out for our members’ needs, first and foremost.

No quacking about it.

Be sure to write or call your local Congressional representative (including Senators Carl Levin and Debbie Stabenow in Michigan, plus local U.S. Representatives Mark Schauer, Gary Peters – who serves on the committee involved – and Mike Rogers) and let them know, as a member, you oppose Sen. Richard Durbin’s Interchange Amendment to the Restoring American Financial Stability Act.

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8 Responses to “American Family Voices: wrong on Interchange”


  1. 2 DJ Morrow Ingram June 16, 2010 at 8:31 pm

    Wow. SO well said. And I love the takeoff on their fax.

  2. 3 Robert Harris June 17, 2010 at 2:42 pm

    Please add me to your blog as a subscriber

  3. 4 Devora Mitchell June 17, 2010 at 7:26 pm

    We need to come up with a marketing campaign that compares us favorably to being a duck. Something like we’ld rather be ducks than pigs.

  4. 5 Diva Deb McLean June 28, 2010 at 8:05 pm

    Awesome job gang! Wonder how the banksters…opps..bankers feel about that!

  5. 6 Michael Hudson June 29, 2010 at 1:58 am

    Well said…excellent point by point response to this ridiculous, off-base, short-sighted ad campaign. It never ceases to amaze how little some people/groups understand about the realities of business and fail to consider the bigger picture, longer-term impacts of what they are supporting.


  1. 1 CU Water Cooler » Blog Archive » CU Water Cooler 6/17 Trackback on June 17, 2010 at 2:18 pm

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