Credit Unions Join Rating Agencies in Criticism of Financial Reform Bill

October 27, 2010 by · Leave a Comment
Filed under: Financial Reform, The Rating Agencies 

The U.S. House of Representatives Democrats approved a plan to place a new financial consumer watchdog within the Federal Reserve.

The independent unit would have substantial budget, staffing and rule-making power, and would consolidate consumer-related duties now dispersed across several agencies, including overseeing mortgages, credit cards and other consumer financial products.

House Democrats also said they will support putting new limits on debit card transaction charges, known as interchange fees, with some changes to a proposal that was originally offered by Senator Richard Durbin (D-IL.)

Mr. Durbin said the changes would exempt prepaid and debit cards used in distribution of government benefits. He said the agreement would allow the Fed in some cases to adjust fee rates on cards for fraud prevention costs.

The National Association of Federal Credit Unions (NAFCU) said it was “greatly disappointed” by the agreement on Durbin’s proposal, predicting it would raise consumer costs and place credit unions at a disadvantage versus large card issuers.

The NAFCU joins the three major credit ratings agencies in criticizing the final financial regulatory reform bill.

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