But credit unions are not the only ones speaking up for smaller debit card issuers. Even Democratic Senators Michael Bennet and Kay Hagan, who initially supported the amendment, are expressing concern that the regulation would create a de facto interchange fee cap for small issuers. It's yet another instance where politics trumped substance.

Even Federal Reserve Chairman Ben Bernanke acknowledged (see our page 1 story) the possibility–you and I would say certainty–that smaller financial institutions will be caught up in the interchange cap despite the toothless exemption.

Credit unions must effectively reframe this as: We will no longer be able to offer free checking to your constituents, Mr. or Ms. Member of Congress, because you did this to us, and we'll make sure our members, your constituents, know it. Explain how much money your particular credit union could actually lose when a data breach does strike and debit cards need to be replaced. Make use of Project Zip Code to show how many members reside in a particular representative's district or a senator's state.

There's not much time to act. The Fed's rule must be approved by April 21, so the showing must be strong and clear. Every single credit union sending representatives to the GAC must take action in killing this statutorily required regulation.

And the underlying issue of interchange fees is not going away. Next could be an affront on credit card interchange fees.

In other news, Har-Co Federal Credit Union has decided to float the idea of converting to a bank to its members. As I've said previously, it's always a matter to study to determine what would be in the best interest of the members.

The credit union has said in its disclosures it needs to convert to be able serve more people, yet it hasn't even tried to expand its field of membership since 2002.

Maybe that's not the whole story, but we don't know at this point because the credit union has not responded to inquiries from Credit Union Times. That's not a good idea, as I'll explain to the audience of the New Jersey Credit Union League's Reality Check Conference.

Given the current economic and regulatory environment, it seems now more than ever there could be legitimate reasons to consider converting to a bank. However, credit unions are in charge of their own fate. Credit unions can look at new products and services or just new ways of delivering them. They can seek out new markets to serve within the credit union charter. They can head to Capitol Hill as a cooperative group working together toward a common goal, like capital reform. Or they can die off one by one through merger, liquidation or convert one at a time to banks. Which sounds good to you?