Samantha Beeler
Whether or not we are in a recession is a popular topic in the media these days. Credit unions, like many financial institutions, can see the economic pressures on consumers first-hand. Most small businesses and families are still trying to dig their way out of the impacts of the global pandemic, find affordable gas, and search the shelves for baby formula. Those advocating for another unnecessary cost for consumers are tone-deaf. Moreover, even in stable economic times, bad policy is still bad policy.
This is why we, alongside Florida credit unions, are so passionate in our opposition to any new proposal in Washington D.C. to add routing mandates to financial institutions and additional interchange regulations on credit cards.
We learned from the regulations put in place by U.S. Senator Dick Durbin (D-IL) during the Great Recession that federal regulations often stifle credit unions’ ability to provide free checking accounts and other services to members. Now, Senator Durbin is working to introduce a new amendment in Washington, calling for more regulations on the routing systems used by credit unions and banks to process member transactions.
Our members immediately engaged with Florida U.S. Senators Rick Scott and Marco Rubio to express our firm opposition to the new Durbin Amendment. We are proud to say that more than 236 contacts have now been made to the Senators, on behalf of the more than 6.6 million credit union members across the state, asking them to oppose the Durbin Amendment back in Washington.
Recently, we, alongside the Credit Union National Association, the American Association of Credit Union Leagues, and other credit union associations across the country, wrote an official letter to Senators to point out the failures of the first Durbin Amendment and warn against a new one. The letter said, in part:
“It is important to recognize that credit cards represent an extension of unsecured credit to a consumer, meaning financial institutions make a loan to a consumer every time a credit card is used to purchase goods or services from a retailer or merchant over a network that was singularly developed for this purpose. Expansion of the Durbin Amendment to the credit market will increase the cost of these low-cost loans, leading to less spending power for consumers and possibly the reduction in important credit building and educational programs offered by financial institutions.”
As their letter states, evidence proves that new, short-sighted regulatory schemes from Washington do not result in “wins” for consumers. Our mission is to protect the best interests of our members and we will continue to fight alongside them against unnecessary new routing and interchange regulations.
We are in an uncertain moment in an uncertain economy, and our laser focus is on advancing and protecting credit unions members and consumers everywhere. We are hopeful that our Florida Members of Congress will stand up and fight because if the Durbin Amendment wins, we all lose.
Samantha Beeler is President of the League of Southeastern Credit Unions