Please replace the release with the following corrected version due to
The corrected release reads:
CREDIT UNIONS ADMIT REVENUE LARGELY UNAFFECTED BY REDUCTION IN DEBIT
CARD SWIPE FEES
Big Banks, Fearing Other Card Reforms, Mislead Consumers
Revenue to small banks has been largely unaffected by a reduction in the
debit card swipe fee, according to an industry survey of credit unions
that confirms similar findings of three other federal agencies on debit
The Credit Union National Association, a trade association representing
credit unions, conducted the survey. Upon passage of debit card reform
in 2011, the credit union industry and small banks feared a severe
However, in an interview with CUNA, the Credit Union Times reported
that credit union revenue from debit cards not requiring a PIN -- which
account for 61% of all debit transactions – have “remained steady
(while) volume … grew.”
“Credit unions have confirmed what the FTC, GAO and Federal Reserve have
found: the small bank exemption from debit reform has worked. This news
demonstrates that debit reform has been good for consumers, Main Street
businesses and smaller banks as well,” said Scott DeFife, Executive Vice
President of Policy & Government Affairs for the National Restaurant
Association and a member of the Merchants Payments Coalition (MPC).
The MPC is a group of merchants concerned about rising swipe fees and
lack of transparency and competition in the credit card market.
Debit reform, legislated in what is known as the Durbin Amendment,
limited the big banks’ price-fixing of the fees they charge merchants
for debit card transactions. All but the largest banks with $10 billion
or more in assets were exempted from the limits.
The credit union survey also reported that revenue from debit cards
requiring a PIN dropped only six percent. Even with the drop, the
revenue is far more than what banks collected only a decade ago when the
fee ranged between about 5 and 10 cents per transaction. CUNA’s chief
economist said not enough data existed to determine whether revenue
generated by PIN debit swipe fees would go up or not in the future,
given the Durbin Amendment’s requirement of greater competition among
card processing networks.
The reports from individual credit unions track similar findings from studies
conducted by the Federal Reserve, the General Accounting Office and the
Federal Trade Commission, which also found no
financial impact on small banks and credit unions.
The MPC also said credit card companies and the big banks continue to
circulate inaccurate and misleading information to consumers about the
impact on smaller banks as a way to kill further
reforms on credit
card swipe fees, which have more than tripled since 2004 and
generate more than $50 billion in annual revenue for banks.
A November 2009 GAO report found that the 10 largest U.S. banks control
88 percent of the credit card market. As such, credit unions and small
banks don’t stand to lose if Congress tackles credit card reform.
“The big banks have pushed the line that small banks are suffering as a
way to stymie further reforms on rising swipe fees on credit cards, but
the facts simply don't back them up,” said Lyle Beckwith, Sr. Vice
President for Government Relations at the National Association of
Convenience Stores, a MPC member.
Recently banking industry officials claimed smaller banks had suffered
from debit reform because the exempted banks had received smaller
payments from companies that process debit card transactions.
However, these same banking officials failed to state that the Durbin
Amendment did not reduce processor fees. In fact, many processors have
reaped a fee windfall as some of them kept charging merchants as though
swipe fees had not been reduced, said Beckwith.
“Some processors and acquirers, including small banks, have realized
greater revenue resulting from reform. They should be ashamed of
themselves claiming their acquiring fees have gone down when some of
them have taken advantage of the reforms to grab extra money,” he said.
Rising faster than health care costs, swipe fees are the second highest
expense for merchants and are calculated into consumer prices. That
equates into a $462 annual “tax” on every U.S. household levied by a
credit card industry that operates in a non-competitive environment
without any transparency. Visa and MasterCard control 80% of the credit
card market and set the fees in secret. Unexplainably, swipe fees on
credit cards are higher in the United States than anywhere else in the
industrialized world – including a full eight times higher in the U.S.
than in Europe.
Read more about debit and credit reform here: The
Facts About Debit Reform and The
Facts About Credit Card Swipe Fees.
The Merchants Payments Coalition - UnfairCreditCardFees.com
- is a group of retailers, supermarkets, drug stores, convenience
stores, fuel stations, on-line merchants and other businesses who are
fighting against unfair credit card fees and fighting for a more
competitive and transparent card system that works better for consumers
and merchants alike. The coalition’s member associations collectively
represent about 2.7 million stores with approximately 50 million