Credit Union President Asks Members to Save Their Reward Checking
Another president of a financial institution that offers a reward checking account has written about the problems of the Durbin Amendment and how it could force them to lower their reward checking rate. The Durbin Amendment is part of last year's Financial Reform Act. It requires the Federal Reserve to set limits to debit card interchange fees.
In January, the president of Royal Banks of Missouri warned customers that the new regulation would likely result in lower debit card fee income which would impact reward checking.
The latest warning was published by the president of Lake Michigan Credit Union. This credit union is one of the few institutions that still offer 4.00% APY on its reward checking account (it's only for balances up to $15K). The credit union president included in the warning a call to action for members to contact their representatives. There is currently legislation in both the Senate and the House to delay the implementation of the Durbin Amendment. Here's an excerpt of the open letter from the credit union president:
Interchange income also plays a big part in Lake Michigan Credit Union's ability to offer you free checking and our high interest bearing Max Checking account. The Durbin Amendment would drastically lower our interchange revenue and result in Lake Michigan Credit Union no longer being able to offer you free checking or pay the great rate of 4% APY* on Max Checking.
The Durbin Amendment exempted financial institutions with assets under $10 billion from the debit interchange fee cap. Since there are only three credit unions with over $10 billion in assets, one might think that most credit unions wouldn't be worried. However, just like Lake Michigan, almost all credit unions are worried that they will not be protected.
Lake Michigan Credit Union president's letter pointed members to the website sponsored by the Michigan Credit Union League, SaveMyFreeChecking.com. This website is designed primarily for Michigan residents. For non-Michigan residents, it points to the Credit Union National Association's Grassroots Action Center which is designed to make it easy for people to contact their representatives.
Guys wake up, they will continue to rob us the innocent victims of the System. It is the poor people who borrow money at 20% not the rich. It is one of the oldest profession. Rich are getting richer at our expense. If you have saved up some money, you are not rich. Rich are those who get rich by robbing others. Do not you think we should close those 256 Military Bases all over the world, why do not we cut the biggest and most expensive arm of our Government which is Defense. Defense for what. Why we have so many enemies, why do not buy those enemies like we buy our senators, and congressmen. You know why, because it is cheaper to spread peace and harmony than spread the animosity, who will use our weapons, divide and rule, divide and rule, Democrats and Republicans, wake up, join together, shake hand and work together to solve our problems, you can do it America, just follow Christ's teaching, do not talk religion, practice religion. Just practice the teachings of the Bible, it will be better world. Bankers are complaining because Chase bank charges $5 if you use their ATM. It is simply extremely profitable. Government can create many jobs only if they have a retirement age. They do not, therefore, there is so much dead wood, if those over 65s retire we can have our young graduates take those positions. I can't believe they have no retirement age in the Federal Government. Many of my neighbor can barely walk and they continue to go to the office, they are unproductive, these are the consequenses of no regulations.
Got this in a newletter from a Michigan Credit Union,"... Although the (Durbin) amendment says that financial institutions under $10 billion in assets will be exempt from the interchange price controls, it will not protect the smaller financial institutions. What this amendment will do, is give the larger retailers the ability to only accept those cards that are issued by the larger institutions in order to keep their interchange fees lower. This would leave financial institutions, like our credit union, unable to compete with the larger ones.
There is nothing in the amendment that provides lower costs to the consumer. In fact, the playing field becomes very uneven between the big mega financial institutions and your local community credit unions and banks. The result ends up being increased costs for the smaller insititutions.
In the current economic environment, where credit unions and local banks have been able to meet the needs of their members and customers, it shifts an unfair advantage to the large banks that during tougher times, weren't meeting the needs of their consumers. ..."
Goes on to ask members to contact their US Senators and US House of Representatives.