CUNA Concerned by NCUA Interchange Letter to Fed

CUNA is concerned that a recent letter sent by the National Credit Union Administration (NCUA) to the Federal Reserve Board regarding debit interchange fees does not accurately reflect the costs associated with card programs.

At the urging of Senator Durbin, NCUA surveyed “direct costs and income” related to credit union debit card transactions. However, a chart attached to the letter appears to demonstrate that credit unions in the range of $500 million to $1 billion make $0.35 per debit card transaction, with credit unions over $1 billion making $0.36 per transaction. For those who take the time to read the letter, it clearly states that not included in those costs were factors such as “labor, facilities, equipment, and other overhead costs related to operating a debit card program.”

Further analysis would find, as credit unions know, that the costs of running a debit card program are not simply per-transaction fees but require significant back-of-house work, time, technology, and many other components.

Instead of just acknowledging that the analysis “likely underestimates costs for debit card transactions” in their letter, CUNA is pushing NCUA to revise this chart to include all costs related to offering debit cards.

Unfortunately, a document like this, as grossly misleading as it is, was provided to the Federal Reserve by NCUA as an accurate representation of debit card fees. It provides fodder for those opposing delay of the Durbin interchange amendment, which, without Congressional intervention becomes effective July 21, 2011.


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

Posted in CUNA, Federal, Industry Insight, NCUA.