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| Highlighting Credit Union priorities prior to Fed Chair Testimony |
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With Federal Reserve Chair Kevin Warsh scheduled to appear before the House Financial Services Committee today, America’s Credit Unions submitted a letter for the hearing’s record on several key credit union issues, to reinforce our concerns and suggested changes.
Those include:
• Urging the Fed to withdraw its proposed Regulation II changes to debit interchange until legal challenges have been resolved, as doing so would “signal clearly that the matter of revising Regulation II is closed until litigation clarifies its legal status, while providing needed certainty to the debit card market for the foreseeable future while waiting for the resolution of the ongoing challenges;”
• Suggesting careful evaluation of the operational and credit risks posed by financial services entities without comparable supervisory regimes to credit unions and banks as applicants for Fed Master Accounts “that are not regularly supervised in the same ways as insured depository institutions could pose risks to the reliability and safety of Reserve Bank payments infrastructure;” and
• Urging the Fed Board of Governors to engage with the CFPB on ways to modernize Regulation CC, which implements the Expedited Funds Availability Act; and to reconsider the scope of check hold rules and exceptions under Regulation CC to incentivize a transition to safer, digital payment alternatives. “The mismatch between the time when funds must be made available and the time needed to fully learn whether a check is payable continues to contribute to significant fraud losses,” the letter notes.
The hearing is scheduled to begin at 10 a.m. Eastern, and Warsh will appear before the Senate Banking Committee Wednesday.
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