CUNA said that the interchange legislation delay, as proposed by bills pending in both the U.S. House and Senate, is imperative because no one outside of the Fed knows what the agency is considering to make good on the chairman's pledge.
Under the terms of the carveout, credit unions and other financial institutions with under $10 billion in assets would be exempt from portions of the proposed interchange rules that would limit the amount of interchange fees charged to twelve cents per card transaction.
Bernanke in a speech delivered this week said that the Fed would do everything it could to ensure that this proposed carveout would work as planned. Bernanke's remarks were made before the Independent Community Bank Association's annual meeting.
Bernanke has said the Fed may miss the Apr. 21 deadline set by the statute, noting that the agency will have to take as much time as needed to draft the rule appropriately (Bloomberg Mar. 2).
Meanwhile, Sen. Richard Durbin (D-Ill.), who authored the interchange legislation, continues to maintain the exemption will shield small credit unions and banks, saying so again during a Thursday press conference. Durbin also noted that he did not anticipate the political response that his interchange legislation has received.
CUNA and credit unions have been emphasizing to legislators and the Fed that the small institution exemption has inherent flaws and is unlikely to work.