Posts Tagged 'congress'

Don’t change Interchange: the song

I guess it would be nice!

To learn more about how Interchange works, and how it may be affected by proposed regulations from Congress, visit the Electronic Payments Coalition.

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Taking our message to Congress

First, thanks to all our members for supporting our Interchange petition drive. We had a lot of members agree with our message in the branches and here on our site, and we appreciate all the support.

Second, we’re taking a broader message to Congress:

[Credit unions are] gathering to advocate for credit union members– to protect them from rising costs, to allow the financial institutions they own build more capital, to help them help the economy recover and grow – and to ensure that their credit unions are around to serve them for a long, long time.

The Hill reports that CUNA’s Governmental Affairs Conference will be a gathering of credit union pros who will take the credit union philosophy – not-for-profit tax status, lower fees, sensible government regulation – to our representatives in Congress.

It should be a heated, active event, especially considering all that’s going on in the financial industry.

Contact Congress about Interchange

There’s a lot of activity going on with the Sen. Durbin Interchange amendment, and we’ve been fighting to keep Interchange as it is. The best way to make your voice heard is through direct contact to your congressional represenative.

Here’s the contact information for our local, south-central Michigan representatives – plus Rep. Gary Peters, who serves on the committee that’s involved in the Financial Reform Bill. Each representative’s website has e-mail information as well as the below address/phone number info.

Rep. Gary Peters
Washington Office: 1130 Longworth HOB | Washington, DC 20515
Phone: 202-225-5802
District Office: 560 Kirts #105 | Troy, MI 48084
Phone: 248-273-4227

Rep. Mark Schauer
Washington Office: 1408 Longworth HOB | Washington, D.C. 20515
Phone: (202) 225-6276
District Office: 800 West Ganson | Jackson, MI 49202
Phone: (517) 780-9075

Rep. Mike Rogers
Washington Office: 133 Cannon HOB | Washington, D.C. 20515
Phone: (202) 225-4872
District Office: 1000 West St. Joseph Suite 300 | Lansing, Michigan 48915
Phone: (517) 702-8000

Sen. Carl Levin
269 Russell Office Building, U.S. Senate | Washington, DC 20510-2202
Phone: (202) 224-6221

Sen. Debbie Stabenow
133 Hart Senate Office Building | Washington, DC 20510
Phone: (202) 224-4822

If you need some help on what to say during your phone call, we’ve done the work for you! Download our Interchange script, add your name and contact information, and send it off.

Hey Congress: Don’t change Interchange

[UPDATE: The fight for Interchange has taken a quacky turn. Check out our response to American Family Voices lobbying efforts.]

The Financial Reform Bill is making its way through Congress, and one amendment – the Interchange Amendment – will make it more expensive and more difficult for credit unions like us to have a debit card program. In the end, you will end up paying more.

We highlighting this fight a few months ago, but now the Financial Reform Bill is getting closer to a vote.

What is Interchange? Interchange is the amount that merchants pay to debit card issuers, like American 1, to maintain our debit system. Interchange pays for security, fraud prevention, upkeep on the system, and more. The Interchange Amendment, however, will reduce the amount of Interchange we receive for each debit payment – meaning we could have to start charging our members to have a debit card.

This is bad for everyone. For one, debit issuers like us assume all the risk for debit card programs. Merchants are paid immediately, but American 1 has to worry about processing all that information. Interchange pays for that upkeep.

Two, merchants claim a lower Interchange will save consumers money. But when was the last time a store dropped their prices or saved you money? They’ll charge the same prices and pocket the rest (as they did in Australia), leaving members to pick up the tab. Or demand cash for each transaction.

Three, merchants could decline smaller debit issuers, like American 1, in favor of big issuers like Bank of America. And we all know big banks like BoA don’t have a friendly card program. But our members may have no other choice if their American 1 debit card is denied at big stores like Walmart, Target, and Home Depot.

All this is why we’re calling Congress and telling them to drop the Interchange Amendment to the Financial Reform Bill. American 1 can’t afford to have a great debit card program without a reasonable Interchange income. The amendment takes away that reasonable income.

To help, CUNA has set up a toll-free hotline to help connect you with your representative in Congress:

(877) 223-5275

Simply dial in your ZIP code and the hotline will direct you to your representative. Leave them a strongly-worded message that you would like them to drop the Interchange Amendment in the Financial Reform Bill. If you’re not sure of what to say to your representative (or their voice mailbox), use our handy script and let your voice be heard.

For more information, here are a few articles:

Help us fight for Interchange

Your debit or credit card transaction goes something like this: You buy something at a retailer, either online or in your hometown, and you go to pay with your card. Your payment gets split, with a tiny percentage going to Visa or MasterCard, and the rest going to the merchant.

But now Congress is looking to change the whole system in a way that hurts American 1 and other financial institutions.

Merchants pay a fee for the privilege of using Visa/MasterCards payment infrastructure. That’s called interchange. Visa and MasterCard pay card providers, like American 1, a bit of that interchange for being a part of their system.

Everyone wins. The merchant gets an ease-of-use system for payments, Visa gets some income from the merchant, and we, as a credit union, get a fraction of that income for providing the debit or credit cards. Interchange is great because it helps credit unions of all sizes to issue debit and credit cards. We see interchange as a merchant’s fair share of the costs of this convenient system.

But it’s more than just convenience. Merchants, the ones taking the Visa or MasterCard payment, pay a small fraction for this service and reap most of the benefits, all while assuming none of the risk. American 1 has to cover the costs for fraud, card errors, and serving debit and credit card accounts. All the while, merchants benefit from the increased purchasing power such card systems provide. When you have a Visa account, for example, it’s easier to pay for more and bigger stuff. The merchant gets all that income, and only has to pay a small, single-digit percentage back to card issuers to maintain the system.

If credit unions like American 1 didn’t provide debit and credit cards to our members, imagine what would happen to local businesses. Or online retailers. Now think about all the other credit unions and banks across the nation. We all have to provide debit and credit cards, and providing that system costs money. The only way we can pay for this convenient system is to charge a fair interchange fee.

Now, Congress is looking to change the interchange fee structure, which means American 1 and other card providers could get less income for providing debit and credit cards. If this happens, our debit and credit card system could cost you, the member, more.

If interchange were reduced and could no longer adequately support American 1’s card system, you, as members, may end up paying more to use your debit and credit cards, or we may no longer be able to offer cards at all. Members of Congress should oppose merchants’ proposals to reduce interchange.

So we’re fighting back with a petition. You can stop in to our Home Office or Argyle Branch locations this week to sign the petition telling Michigan’s senators, Carl Levin and Debbie Stabenow, that we don’t want them messing with interchange income. Use those links to e-mail your senator, and your local Congressional representative, and tell them we don’t want any reduction in interchange income.

What does the stimulus bill mean to you?

A bit, according to The Consumerist. Mostly, it’s extra tax breaks: a tax break if you purchase a home sometime in 2009, an individual and couples tax credit, extended unemployment benefits, and a few more noteworthy items.

The original document is about 1,000 pages long, so we appreciate these news outlets skimming the giant package into a more digestible chunks.

Credit union bailout? Not so fast.

Two recent articles – one at the Washington Post and another at the Wall Street Journal – leave the impression that credit unions are receiving a bailout from the government, like banks and insurance companies.

But things aren’t always as they seem, and credit unions are not receiving a bailout. In fact, credit unions are doing much better than banks.

The two stories focus on an institution that services credit unions, U.S. Central Corporate Federal Credit Union, an institution that handles financing and transactions for a big group of credit unions. U.S. Central doesn’t service members, like you or your neighbor. It services other credit unions. Think of it as a credit union for credit unions.

But the way the Wall Street Journal and the Washington Post make it sound (with headlines like “U.S. Aid Goes to Credit Unions”), the entire CU industry is in need of a handout. And that’s just not true.

What happened was U.S. Central took a group of credit unions’ money and invested it those mortgage-backed securities we keep hearing about. When those investments went sour, U.S. Central asked for a $1 billion loan (not bailout) from the National Credit Union Administration (NCUA) – the same government agency that insures your deposits at American 1. This isn’t Congress handing money to a financial institution that made bad decisions – as has happened a lot since September. Instead, it’s credit unions stepping in and helping out one of their own institutions.

Does this affect you or your membership at American 1? Not at all. American 1 is doing well financially. In fact, we trust our deposits with the Federal Reserve because of its reliability.

While newspapers seek to build up interest in stories by writing provacative headlines, the WSJ and Post went a bit too far with their misleading headlines.