WASHINGTON, March 2, 2011 /PRNewswire/ -- Today, the House Subcommittee on Financial Institutions and Consumer Credit held a hearing to examine the consequences of the Dodd-Frank Act on small financial institutions. The Electronic Payments Coalition issued the following statement:
"Today's hearing confirmed what community banks, credit unions and their customers have been saying for months: the Federal Reserve debit card interchange rule will hurt small financial institutions and their customers. The so-called 'exemption' for these institutions simply will not work. Debit cards will become the most expensive product in the market, opening them up to discrimination at the point of sale by retailers who will prefer to accept the price controlled card.
"In testimony before the Senate Banking Committee on February 24, Federal Reserve Chairman Ben Bernanke confirmed fears about the exemption, stating that it may not be effective in the marketplace. FDIC Chairman Sheila Bair concurred, saying that 'the likelihood of this hurting community banks . . . is much greater than any tiny benefit retail customers may get.'
"Recent surveys performed by the Independent Community Bankers of America (ICBA) and the National Association of Federal Credit Unions (NAFCU) confirm that the rule will hurt consumers. Nine out of ten community banks said that they would be required to charge customers for services that are currently free, and 72 percent indicated that they would implement fees for debit cards. Almost half of credit unions said they were considering ending free checking accounts, and some are considering job cuts as a result of the rule."
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC's goal is to protect the value, innovation, convenience and competition in today's growing electronic payments system. EPC educates policymakers, consumers, and the media on the system's role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.
SOURCE Electronic Payments Coalition