Senator Udall Places Hold on Community Bank Bill
In Feb 28th's issue of the American Banker, a headline reads “Community Bank Bill Gets Tied Up in Credit Union Fight.” Colorado Senator Mark Udall using the rules of the Senate to help credit unions placed a hold on an important piece of legislation to community bankers. Senator Udall has made his support conditional on the inclusion of the Member Business Lending bill in the legislation. It’s a great read Linked HERE.
Debit Card Interchange Fees and CUNA Merchant Reporting Form
CUNA has recently learned that there may be additional concerns regarding debit card interchange fees. Some networks may be working on changes to their fee structures to ensure they will be able to pay the largest issuers, those that are not exempt from the fee cap on debit interchange transactions, the full amount permissible under the Federal Reserve Board’s debit interchange regulation, which is about 24 cents per transaction. They may be trying to do this by slicing off some of the interchange fees they pay to smaller issuers that are not subject to the fee ceiling. CUNA is following up with the Federal Reserve Board and others on this matter.
CUNA continues to work in other ways to protect debit interchange fee income for credit unions with the Federal Reserve Board (Fed) and networks to ensure that a two-tiered system is provided for and maintained for small issuers.
CUNA has also launched a new confidential password protected web submission form for credit unions to provide feedback on any experiences they may have had regarding merchants that have engaged in prohibited practices. Merchants may not attempt to steer, refuse to accept, or frustrate the acceptance of debit cards due to the fact they were issued by credit unions or small issuers not subject to the debit interchange transaction fee cap. Earlier last week, the Fed released a debit interchange compliance guide for small financial institutions, including credit unions, which summarizes its debit card interchange fees and routing regulations. CUNA will be providing more information on the guide shortly.
Update on IRS Notices Regarding Credit Unions’ Tax-Exempt Status
Last Week, Bill Cheney sent a letter to the Internal Revenue Service urging the agency to take immediate action to correct a very serious error that has resulted in the purported revocation of the tax-exempt status of a number of credit unions that have been diligently filing Form 990 information returns for years. Credit unions in several states have received notices from the IRS’ Exempt Organization Division that they are no longer considered tax exempt organizations. CUNA legal staff members have been on top of these developments and are pushing the IRS to correct its error as soon as possible.