As advocates for financial inclusivity and affordable banking solutions, the California and Nevada Credit Union Leagues are grateful for Reps. Young Kim (R-CA) and Jimmy Panetta’s (D-CA) recent letter they championed and sent to Federal Reserve Chair Jerome Powell regarding the Federal Reserve Board’s (FRB) proposed debit interchange fee rule.
This letter, addressing proposed changes to Regulation II, resonates deeply with credit unions as it underscores the potential ramifications for access to affordable banking.
In total, 38 members of Congress signed the letter. Credit unions were negatively impacted after the initial rule was published in 2011, with interchange fee revenue dropping 30 percent. Consumers also suffered as free checking accounts dropped by 40 percent.
“The potential impact of these proposed changes on low-income consumers cannot be overstated,” said Diana Dykstra, president and CEO of the Leagues. “We are deeply concerned that the Regulation II price cap proposal may reverse the significant strides made in financial inclusion efforts.”
In their letter, members of Congress emphasize the importance of striking a balance between meeting consumers’ needs and ensuring the economic viability of financial institutions offering low-cost accounts. They caution against any drastic reduction in debit interchange rates, citing the potential adverse impact on the sustainability of consumers’ ability to access affordable banking products.
Credit union leaders recently met with representatives Kim and Panetta in Washington, D.C. as part of the 2024 Governmental Affairs Conference (GAC). The Leagues commend Kim and Panetta for their unwavering support in safeguarding the interests of low- and moderate-income consumers in the banking sector.
By advocating for policies that promote inclusivity and affordability, policymakers can ensure all Americans have equitable access to essential financial services, thereby laying the groundwork for a future where all can achieve financial wellbeing.
