Protect Members' Credit, Protect Interchange
Consumers nationwide (that’s you!) rely on credit cards to manage their day to day lives. From paying for groceries or travel, to covering emergency household repairs or medical expenses, credit cards are valuable tools because they are accepted nearly everywhere and generally offer robust security, fraud protection, and access to funds that may not otherwise be available.
Interchange fees, which are only a fraction of a cent per dollar spent, make these credit card perks possible. Interchange keeps consumers, merchants, and financial institutions (like ours!) safe.
Interchange Fees are in Danger—What does that mean for you?
Interchange fees, typically paid by merchants, are under fire as of July of 2022. Senate bill S. 4674 was introduced this Summer, and if a house version follows, at stake is a reduction of these fees, which could result in a significant increase in credit unions’ and members’ exposure to security and fraud risks.
Changes to interchange mean changes to credit. The robust security features that make credit cards so appealing come at a cost. Interchange fees cover those costs, and without these integral features there is a real threat to data security. Since 2011, fraud rates have doubled. Without the protection credit cards typically offer, this rate is expected to increase exponentially. In a time where so much of our lives happen online, there is reason for alarm.
What’s at Stake
When a merchant’s systems are breached or a card is otherwise compromised, financial institutions absorb a significant portion of the cost. Fraud and credit monitoring helps keep these costs lower as well as keeps members safe. Weakening interchange weakens these protections offered and could increase the financial impact on institutions.
Because of these factors, according to polling performed by Credit Union National Association (CUNA), reduced interchange rates could inhibit many credit unions’ abilities to continue offering credit cards:
73% would have to raise credit card rates
61% would have to implement or raise credit card program fees
15% would have to reduce or eliminate their card program entirely
What can YOU do to help?
Make your voice heard! We, as a credit union, strongly oppose this legislation and what it means for our members as well as our institution. We want to be able to continue offering our low fixed-rate credit cards, running stellar promotions, and keeping your data and credit SAFE!
We are asking for the following:
Visit CUNA’s Protect My Card website to further learn about the risks of this legislation, and submit your information to our Senators Ben Lujan and Martin Heinrich, as well as Representative Yvette Herrell.
Share this information with your friends and family! Even if they are not members of RCFCU, this will affect anyone with a credit card!