From my Credit Union - is this something to be concerned about?

I got this from my Credit Union. I've been with them forever; they've never asked me to do anything at all before. Not sure what to think:

It's not often that Patelco Credit Union emails our members for non-account related reasons, but I feel it's extremely important to inform you about an issue which could negatively impact the members of Patelco Credit Union as well as other Credit Unions across the country. This concern focuses on pending federal legislation concerning Interchange that could affect the system that processes credit card and debit card payments.

What is 'Interchange'?
Each time you use your Patelco Credit Union MasterCard®, VISA® credit card or debit card, the merchant is paid immediately and the Credit Union receives what is described as an "Interchange" fee (paid by the merchant) through the card payment processing system. This fee reflects the merchant's fair share of the costs of this convenient and beneficial payment system.

Importance of 'Interchange' for Patelco Credit Union
At Patelco Credit Union, the income from interchange supports our credit and debit card programs and allows us to offer these cards with NO fees, low rates, and extra benefits such as our rewards program and cash back program. We manage the costs of our card programs to 'break-even' by giving our members added benefits not readily found elsewhere.

Pending Legislation Threatens Patelco Credit Union
The U.S. Senate recently passed S. 3217, the Restoring American Financial Stability Act and Congress is now considering the bill. Current amendments to S. 3217 would be harmful to Credit Unions and consumers alike. It would reduce the amount of interchange fees paid to us by retailers and threaten our ability to offer debit and credit cards while at the same time NOT requiring merchants to pass their 'savings' on to consumers in the form of lower prices. In addition, it would allow merchants to interfere with consumer choice by arbitrarily varying terms of card acceptance meaning they would have the right to only accept debit or credit cards from certain financial institutions.

We Need Your Help
The current interchange system allows Patelco Credit Union to provide competitive and member-friendly credit card and debit card services to our membership. Please join us in urging our Senators and Members of Congress to protect Credit Unions by rejecting the changes associated with this legislation.

Connect for the Cause
We encourage you to send a message today to your elected officials urging them to oppose any amendments to S. 3217 which would affect debit and credit card-issuing Credit Unions and the card payment system.

A pre-written letter is available for your use at Connect for the Cause, a tool created by the California/Nevada Credit Union League to help members easily 'connect' with their elected officials about causes affecting Credit Union members. Please visit Connect for the Cause www.connectforthecause.org and find the "Oppose Interchange in S. 3217 (Oppose)" article in the center of the page. Click the "Take Action" link to create your profile and send a form letter e-mail to your two Senators and Member of Congress regarding this important matter.

Thank you for your support,



Ken Burns
President/CEO
Patelco Credit Union

 


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stance on something in support of them. I wonder how much they would suffer if such a bill passed...I would look at the bill and see if there's anything that actually benefits you as an account holder before signing a petition or letter to your senator.

Weird! :yoiks:

It sounds like a credible concern.

to reduce the competition they get from the credit unions. I read a big article about it in either the Financial Times or the Wall Street Journal a couple of years ago. It's not really weird for a co-op to be writing to its members.
But fees for merchants are too high, so I'm not sure its really a good idea.

Credit unions beat the living shit out of Shittibank, Bank of UnAmerica, Chase Manslaughter and the rest of those thieving sons of corrupt bitches. And they know how fucked they are if people wake up and realize that.

Anyone who has their money in a big bank should switch to a credit union ASAP. If none is available, switch to a small local bank. Don't willingly give the criminal banks your business.

in the cross hairs along time friend. The nerve of lending money to union members is a big no-no to big time banks.

transaction fees for merchants. See below.

Fuck them. Get another bank/credit union. That's wrong on way too many levels to enumerate in a single post.

What's really sad is that they're getting so up in arms about this financial reform bill, which is a band aid at best.

The way the interchange fees are set now, it is a really good deal for banks and consumers. Banks can charge retailers essentially what they want, and can then offer their customers extensive rewards programs for using their debit cards. However it is a really bad deal for small businesses, already working on small margins, that accept debit cards.

If this goes through in its current form, I wouldn't be surprised to see lots of rewards programs, free services, ect that banks offer start to go away or cost money.

It's all about trade-offs.

really came from them.

Maybe your Credit Union is different, but my own Credit Union constantly assures all its members that it will NEVER communicate by email except for things like announcements that "your monthly online statement is ready for veiwing". This is to prevent people from falling for email scams. All other communications, including meeting announcements and such, are done by snail mail.

For all you know, this "Connect for the Cause" group has highjacked your Credit Union's membership list in order to send out these emails.

Give your Credit Union the opportunity to either confirm or deny that they authorized these emails. Then you can respond as you see fit.

sw

VISA and MasterCard provide a service to CUs, Banks, Consumers and Merchants. The banks/CUs set up their debit/credit cards with these clearing houses so that each merchant doesn't need a direct line to the bank. One line to VISA/MC is all the merchant needs and all the bank needs. VISA/MC do all of the intermediary work.

For this convenience, merchants pay typically between 2-4%. Some is profit for VISA/MC and some for the bank depending on the arrangement. There is no direct cost to the consumer (with the exception, for example, of gas stations giving discounts for cash to avoid this fee). Many smaller merchants have a 'floor' ($1 per transaction plus ~x%). Also why many small merchants have minimums that you can charge (no charges under $5) and others are cash only.

Congress is suggesting limiting this fee to something (going by memory) like $0.50 per transaction as opposed to a % of the bill.

If enacted, you can bet your sweet bippy that debit VISA/MC, and by extension, pure credit cards like AmExp will find a way to raise prices for everyone. They have to. They have to pay their bills.

You are in the middle.

This measure is intended to lighten the costs for merchants. If it goes through, it will cut the profits for the ccard processors and banks who collect these fees.

What your CU is telling you is that if Congress removes the burden from merchants to pay for this centralized processing, they will be forced to pass their costs onto you, and rightfully so. This is because the cost of the "convenience" isn't going away - only the revenue that paid for it. There is no such thing as a free lunch and processing these charges costs money.

If you are not sure where you stand on this, make an appointment and talk with your branch manager about all of the implications.

To assume that the fee is really commensurate with the cost of providing the convenience is a faulty one. These flat fees and percentages are not based on anything related to the cost of actually providing the service. But they certainly impact any profit or fund balance increase (for a non-profit CU). I'd love to see a reconciliation between the fees collected versus the amount needed to provide the service.

Only explaining how the system works today.

I am right behind you in questioning that the fees currently charged merchants is warranted, but going from a % to a flat fee is going to freak out the banks who have to pay a % on the transactions, meaning they will pass those costs unto us, the consumer.

If I recall, Paypal charges something like $0.30 + x% per transaction. That may be where this is headed, but for now, the banks and CUs are spooked as no mechanism is in place for consumers/merchants to bear the additional costs and the processors (VISA/MC) will certainly pass it on to stay afloat if a flat fee is set.

CCard processors win, merchants win, banks lose = consumers holding the bag with no more free debit/credit.

(Noting merchants really LOSE business lost by moving to a 'cash only' operation)

Under penalty of losing their credit card acceptance privileges if they do. I have just seen it mentioned a few times but have not actually seen any real confirmation. Curious if it is true?

Don

CT passed a law allowing cash discounts for gasoline, and voided any card agreement penalty that conflicted with that law.

One planned outcome of the Bush/Republican financial crisis is to destroy all smaller financial institutions.

You all have noticed all the bank closings...right?

This 'fee' change will divert the cost to us and our Credit Unions. This will
harm the vary philosophy of what Credit Unions are all about.

This is all about sticking it to, once again, you and me, and harming institutions that side with citizens.

All sheep share a common destiny.