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Rep. Blaine Luetkemeyer (R-Mo.) introduced a bill in the House of Representatives that would potentially stop the Federal Reserve's finalization of its proposed debit interchange rule – a rule credit unions are very much against.
Rep. Luetkemeyer formally introduced the Secure Payments Act (H.R. 7531) this week "to stop the Fed's disastrous plan" from going into effect. Luetkemeyer has been an outspoken critic of the Fed's proposal as well as the Credit Card Competition Act.
"Two very bad options based on two very bad ideas," he said.
In a statement posted on his official website, Rep. Luetkemeyer said, "If you're comfortable with the government setting prices for goods and services, a cap on a fee that is paid to a bank doesn't sound so bad. You would assume (or at least hope) that lower fees paid by merchants would lead to lower costs on the things we buy from those merchants. In fact, when lobbying for the bill back in 2010, that's what big retailers like Home Depot promised to do. Unfortunately, but not surprisingly, that's not what happened.
Rep. Blaine Luetkemeyer "The Dodd-Frank bill passed in July of 2010. In February 2011 Home Depot's CFO reported to shareholders that the new law increased the company's profits by $35 million. As suspected, none of it was passed onto customers. In fact, according to the Federal Reserve Bank of Richmond, 21% of merchants actually increased their prices after the rule went into effect."
Credit union leaders were quick to praise Luetkemeyer's efforts.
"Credit unions need access to as many resources as possible to provide critical services in rural and underserved communities across America, and we've already seen that debit interchange restrictions limit those resources and ultimately hurt consumers," America's Credit Unions President/CEO Jim Nussle said. "The Federal Reserve's proposal to reform all three components of the Regulation II interchange fee cap deserves a study to fully understand its potential consequences.
Jim Nussle "Congressman Luetkemeyer has been a fierce partner in this fight and we thank him for introducing a commonsense piece of legislation that will bring real time data and evidence to the Federal Reserve's effort. America's Credit Unions looks forward to supporting policies that allow people to live their best financial lives."
Jim Phelps, EVP and chief advocacy officer with the Cornerstone League, said, "A stop-and-study bill is a favorable outcome for credit unions at this juncture because there is so much credible, strong evidence that not only does the current interchange system work, but also consumers and credit unions have nothing to gain from changes to the system. While the stop and study bill is in response to the Fed's proposal on debit interchange, this development will shine a light on the fact that small businesses will not benefit from the Credit Card Competition Act — only the big box retailers."
It's unclear how far Luetkemeyer's bill might make its way through the legislative process, especially since he announced his retirement in January from the House of Representatives where he has served since 2009. His current term ends in December.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
