CUNA Regulatory Advocacy Update

Debit Card Interchange Fee Regulation
CUNA continues to press the Federal Reserve Board for improvements in its debit interchange fee regulation, in order to protect credit unions in the event a delay is not provided by Congress. CUNA is sending another letter to Chairman Bernanke urging him to delay implementation of the routing and exclusivity arrangement provisions of the interchange amendment for 24 months. While the interchange amendment requires the provisions regarding debit interchange fee restrictions to be effective July 21, 2011, Congress did not establish a compliance deadline for the routing and exclusivity arrangement provisions, which require issuers to belong to at least two independent networks and allow merchants flexibility in the routing of debit card transactions.

We are also working with our coalition of financial institution groups to file an amicus brief by May 5, 2011, in the U.S. Court of Appeals for the Eighth Circuit in TCF National Bank’s lawsuit against the Board over the debit interchange fee regulation. The Appeals Court is reviewing whether an earlier district court ruling to allow the implementation of the interchange statute to continue was reasonable.

NCUA Budget
While the Association and CUNA raised objections about the agency’s budget—which represents a 12 percent increase year on year—the agency has not been responsive to these concerns. As virtually every other federal agency is looking for ways to contain its costs, CUNA is talking with the Office of Management and Budget, a Cabinet-level office within the Administration that develops the federal budget and oversees its implementation, and have meetings scheduled regarding the agency’s budget. 

Other NCUA and Examination Issues
While the information about the NCUSIF premium continues to be positive, there is concern that NCUA is planning more regulatory proposals over the summer, including: member business loans, investments, portfolio concentration risk, CUSOs, and loan participations.

CUNA will continue to seek more information about these developments and urge NCUA to utilize a regulatory approach that focuses on problem areas and examiner training as opposed to issuing blanket rules that limit all credit unions, including the majority that are well managed.

CUNA and CUNA Mutual representatives recently participated in a conference call regarding the regulation of Multi-Feature Open-End Lending (MFOEL), such as the LoanLiner product, with NCUA officials. The purpose of the call was to express concerns about inconsistent examiner treatment of MFOEL products after recent changes to Regulation Z and its staff commentary took effect. 

NCUA is in the process of revising a letter to federal credit unions on MFOEL that NCUA issued last year (Letter to Credit Unions 10-FCU-02) in order to help address these issues. CUNA and CUNA Mutual plan to have a follow-up meeting with NCUA staff regarding the revised letter to credit unions on MFOEL in the near future.


Questions or comments? Contact Director of Regulatory Affairs Jaycee Winn: 503.350.2209,

Posted in CUNA, Federal, NCUA.