St. Petersburg, FL, July 15, 2010 – Following today’s Senate approval of the Finance Reform Bill, PSCU Financial Services’ Interim CEO Mike Yatros said he is extremely disappointed with the new debit interchange legislation and rules that will give merchants new control over usage of cards at the point of sale.   

“We’re obviously upset with the final language of the bill and the potentially negative impact this legislation can have on consumers, credit unions and their members,” Yatros said. “We have now launched a proactive communication effort with the Federal Reserve Board (FRB) to ensure that its members understand the fundamental differences between debit cards and cash/checks, the associated risks for issuers and the benefits enjoyed by merchants.”

“We are simultaneously working strategically within our organization to find ways to minimize the impact of this legislation on the credit unions we serve,” he added.

In recent months, PSCU Financial Services conducted numerous educational webinars and conference calls with credit unions to inform them about this legislation and help them communicate effectively with members of Congress. The cooperative also provided “click through” call-to-action alerts that enabled credit union executives to input their zip code and automatically send a letter opposing this legislation to their Congressional representatives.  

The final bill includes the following actions: 

• The Federal Reserve Board will regulate debit interchange rates. These rates cover all debit and prepaid cards, signature and PIN, and all card payment networks. Financial institutions with less than $10 billion in assets are exempt from the interchange rate action. 
• Retailers can offer discounts for payment method (cash, check, debit cards, credit cards and prepaid cards) but will not be permitted to offer discounts for payment network brands. 
• Retailers can apply minimum dollar amounts (no greater than $10.00) for credit card usage.
• Issuers and networks cannot limit debit card transactions to only one network and cannot restrict a merchant’s ability to route transactions to any payment card network that processes their transactions.

Reloadable prepaid cards and card programs issued by government agencies are exempted from this legislation. Maximum transaction amounts will only be allowed by government agencies and institutions of higher learning for credit card acceptance. Rates set by the Federal Reserve are limited to the issuers’ earnings on interchange. Network fees will not be regulated except to ensure that they can’t be used to circumvent legislation or network routing.

The FRB will have nine months to write the final rules regarding interchange. As with other regulations that have been implemented by the FRB, comments and  recommendations from financial services providers and other stakeholders will be considered. 

PSCU Financial Services

Based in St. Petersburg, Florida, PSCU Financial Services is the nation's largest credit union service organization (CUSO) and serves more than 1,500 financial institutions nationwide. As a non-profit cooperative, the company is owned by more than 640 member credit unions representing over 14 million accounts and 1 million online bill payment subscribers. Its Contact Centers handle more than 17.4 million inquiries a year. 

PSCU Financial Services offers 24/7 member support through four Contact Centers: its Eastern operations center in St. Petersburg, Fla.; a Western operations center based in Phoenix, Ariz.; and two call centers in Detroit, Mich. These Contact Centers perform member servicing and new member acquisition, cross-selling and automated lending solutions as well as support for debit/credit/prepaid cardholders and online bill payment subscribers. 

Established in 1977, the company provides a broad array of cost-effective, high quality financial services that include credit, debit, ATM, prepaid, bill payment and contact center solutions. PSCU Financial Services uniquely offers its members a full range of processing options, any combination from full service to in-house pass through processing for credit, debit and ATM transactions. As a leader in the credit union movement, the company offers gateway access to national and regional networks. It also provides full function ATM terminal driving services. For more information, visit PSCU Financial Services’ website at www.pscufs.com.