Members and employees of California Bear Credit Union were taken aback when retailers refused to accept their credit union's debit cards and requested they use major bank payment cards.
The reason? Their debit cards' expiration months were within the next 30 days.
That's according to the Los Angeles-based, $107.6 million credit union's president/CEO, Robert York.
On Nov. 18, York sent an e-mail to a group of fellow credit union CEOs and the California and Nevada Credit Union Leagues stating that retailers told Cal Bear CU members and two Cal Bear CU employees they would not accept debit cards that were within 30 days of their expiration months.
LA Fitness and Regal Cinemas rejected the two Cal Bear CU employees' debit cards, and both companies asked the employees for payment cards from major banks instead, York said in his e-mail.
“The fact that they refused to accept a card from a small issuer to collect payment and then immediately asked my employees for a card from a 'big bank' means they are trying to get around the small issuer provisions in the Durbin amendment,” York wrote.
Debit transactions from institutions of below $10 billion in assets are not subject to the 21 cent cap imposed in October.
“I don't know how widespread this form of card discrimination is but the fact that two of my employees had similar experiences just recently concerns me,” he continued. “We need to be diligent in monitoring, sharing and reporting these instances to the CCUL and the PAC so that they can make sure that these stories are heard by the lawmakers and the Fed.
“We also need to educate our members and let them know that it is illegal for retailers to refuse to accept their credit union debit card for any reason other than the fact that the funds to make the purchase are unavailable.”
In a written statement to Credit Union Times, York said the California and Nevada Credit Union Leagues advised his CU to report all “debit card steering” incidents to Congress and the Federal Reserve.
League President/CEO Diana Dykstra reminded the credit union that the League has a vehicle for reporting debit card steering incidents on its website, and that in order for complaints to be directed in aggregate to Visa and MasterCard, CU CEOs should maintain a single point of contact at the companies, York said.
Cal Bear CU's front line and phone center staff is taking reports of debit card steering and “encouraging members to stand up for their right to use the debit card of their choice to make purchases,” York said in the statement.
The credit union's report comes on the heels of the National Retail Federation's suing of the Federal Reserve in protest of the agency's debit card swipe fee rules and two congressmen's filing of a bill to repeal the Durbin amendment.
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Natasha Chilingerian
Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.
