We see it as our duty to inform you when there’s pending legislation that has the potential to impact our ability to serve you. One service that we offer to our members is the use of debit and credit cards. Our members use these cards for their convenience and the sense of security that comes with knowing their funds and transactions are guaranteed by our credit union. What they may not realize is that using these cards includes a transaction cost.
When you use your credit or debit card, a small fee—known as an interchange fee—is incorporated into the transaction. Interchange is what credit unions, other financial institutions, card networks, and payments processors use to guarantee full payments and recover expenses, such as fraud and theft; fraud monitoring; issuing and reissuing cards; and administrative costs.
When a data breach or unauthorized use of a card occurs, Traverse Catholic FCU often bears much of the cost as we take action to limit our members’ risk. These costs include:
- Paying back fraudulent charges,
- Reissuing new cards,
- Credit monitoring for victims of identity theft, and more.
Rarely are these costs assumed by the bad actors committing the fraud, or the retailer where the fraud occurred.
As the cost of these data breaches rise, it’s more important than ever for Traverse Catholic FCU to collect interchange fees.
New legislation would put your data at risk
Right now in Washington, there is a bill in the Senate that would allow retailers to pick and choose which network they use for credit card transactions. With only their bottom line as motivation due to the protections provided by financial institutions like us, the retailers will choose the cheapest – not most secure- option. Interchange is the safety net that helps us help members like you when merchant data is compromised. Interchange should only be reduced when merchants are going to start being held financially responsible for their data breaches. The changes proposed by these lawmakers will lead to less secure, less innovative, and higher-risk transactions for American consumers like you. Consumers, small businesses, and small community financial institutions will lose the most if this happens. Send a message to your federal lawmakers and tell them to oppose S. 4674, the Durbin-Marshall Bill.
Click HERE to take action!
The current system works! Consumers have a safe, reliable credit payment system. Merchants are made whole at time of sale. Credit routing mandates would hurt small businesses who are still recovering from the economic impact of the pandemic. With billions driven from the credit market, lenders will be forced to reduce small business lending to recoup their losses.
Additionally, changing the current system could mean our credit cards might not work, with charges declined at some retailers or in some locations while traveling. Merchants are looking for the lowest cost option, not the most secure. We need to leave the routing decisions in the hands of those who bear the liability and consequences.
What We Need from You
At Traverse Catholic FCU, we value civic engagement. I hope you’ll consider lending your voice to this important effort. Please click on this link to learn more about the problem and send an e-mail to your U.S. Representative and U.S. Senators. Tell them you oppose S. 4674!
