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INTERCHANGE UPHELD IN COURT RULING
updated 03/21/14 10:44 AM
CUs Celebrate Outcome
The credit union movement welcomed a federal appeals court ruling last Friday that upheld the Federal Reserve's debit card interchange regulation from 2011, keeping it intact.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit unanimously reversed an earlier decision of U.S. District Judge Richard Leon, issued in July, that the Fed interchange rules violated the plain text of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In 2011, the Fed capped large card-issuer debit interchange fees at 21 cents to cover network connectivity, hardware, software, and labor costs, as well as costs related to network processing and transaction monitoring, which put big retailers on the offensive since they thought it was too lenient. "Large card issuers" were deemed as financial institutions with $10 billion in assets or more, which means only four U.S. credit unions would be affected.

However, several credit unions under that threshold have remained skeptical as to how the ultimate rule would play out, as well as how much interchange revenue was likely to drop as a result of market forces in retail and card payments.

The latest court ruling “is a positive turn of events regarding debit interchange fees and will greatly impact credit unions throughout the country,” said Diana Dykstra, president and CEO of the California and Nevada Credit Union Leagues.

By superseding Leon's opinion, this newest ruling removes the chaos and confusion caused when Leon vacated the Fed rule and then issued a stay so the rule remained in place until the appeals process was completed. In this case known as NACS, et al. v. Board of Governors of the Federal Reserve System, a merchants' coalition challenged the Fed's implementation of a Dodd-Frank Act-imposed debit interchange cap as too high. The Credit Union National Association (CUNA) and its partner members of The Clearing House coalition have maintained that the cap is too restrictive.

CUNA General Counsel Eric Richard explained of the judges' opinion, "This decision constitutes an almost total rejection of the merchants' arguments. We hope this will be a first step toward restoring some grounding in reality to the debate over interchange fees, not only in the courts, but also in Congress and at the regulatory agencies."

The National Retail Federation said it is disappointed in the decision, and it is weighing an appeal to the U.S. Supreme Court.

 
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SUPP. CAPITAL FOR RBC GAINS ADVOCATE updated 12/16/14 11:04 AM
McWatters Supports Model for CUs
National Credit Union Administration (NCUA) Board Member J. “Mark” McWatters recently said he supports including a supplemental capital provision in the agency's risk-based capital (RBC) rule to help credit unions meet the rule’s requirements.

CU DIRECT TO DONATE 20K TO CMN updated 12/16/14 11:03 AM
‘20 for 20’ Anniversary Campaign
CU Direct, the nation’s leading provider of lending, automotive, and strategic solutions for credit unions, is celebrating its 20th anniversary by holding a contest to donate $20,000 to one of the nation’s Children’s Miracle Network (CMN) hospitals.

NCUA MAY BE LIABLE FOR DATA BREACH updated 12/16/14 10:05 AM
Flash Drive with Member Info Lost
The National Credit Union Administration (NCUA) confirmed on Dec. 15 that a flash drive containing the personal information of Palm Springs FCU member was lost during a recent audit. The loss of data includes names, addresses, Social Security numbers, and account information.

PREPARE FOR HEALTH CARE REQUIREMENTS updated 12/16/14 09:42 AM
Also, Digital Media and Marketing
Federal health care law requirements, creating a quick digital message, and the marriage of innovation with marketing are all highlighted within the latest “Problem? Solved!” column in Credit Union Digest!