Peoples Advantage FCU CEO Amanda Habansky Participates in Interchange Meeting with Fed Board Vice Chair

On Monday, Peoples Advantage Federal Credit Union CEO Amanda Habansky joined staff from America’s Credit Unions, various Leagues, and credit unions for a meeting with Federal Reserve Board of Governors Vice Chair Philip Jefferson. Credit unions met with Jefferson to discuss the pending rulemaking on Regulation II.

The pending rulemaking would bring about a steep reduction of almost one-third in the core component of the interchange fees paid to institutions covered by the regulation and a separate reduction for a component that generates interchange income based on the purchase amount. The fraud prevention cost component of debit card interchange would rise from 1 cent per transaction to 1.3 cents per transaction.

Vice Chair Jefferson voted in favor of issuing the proposed rule at the Fed Board's October meeting.

Habansky noted the importance of interchange income to her credit union, including how that revenue enables the credit union to continue its financial empowerment work.

During the meeting, credit unions highlighted the failings of the rulemaking process and the proposed rule including the necessity of the rulemaking, issues with the data used to support the Notice of Proposed Rulemaking, and the impact of the regulation on credit unions. Credit unions in attendance spoke to the reality of operating a debit card program today in an environment of skyrocketing fraud and serious capital and liquidity challenges—all while continuing to prioritize the financial well-being of their members.

Because this is an open rulemaking, Vice Chair Jefferson was unable to provide feedback on our comments, but he was very engaged throughout the meeting.

The Federal Reserve extended the comment deadline on its interchange proposal to May 12, an additional 90 days past the original Feb. 12 deadline.

“We have carefully examined the Federal Reserve Board’s proposal and will submit comments. We know the fraud costs our credit unions are facing continue to mount and we must have fairness in the system,” said League President/CEO Carrie Hunt. “The League remains engaged with policymakers on this issue because we understand the debit interchange fee cap had an impact on every financial institution, not just those issuers with $10 billion or more in assets. We know, too, that the price cap imposed on debit interchange fees is a failed policy that’s had a disastrous impact on the cost and availability of basic banking services, harming low- and moderate-income Americans.”

Related: League Will Comment on Federal Reserve Board's Proposed Rule for Revision of Debit Interchange Fee Cap
Related: Federal Reserve Proposes Changes to Debit Interchange Cap