Interchange proposals being considered in Washington, D.C., will make using credit cards riskier and more expensive, wrote Kathy Harrington, president of Heartland Credit Union, Inver Grove Heights, Minn., in the Brainerd Dispatch this week.
“Overhauling the interchange system needs to make sense for everyone it affects. We know that [interchange bills] would cut costs for merchants, but that comes at a cost for consumers,” she wrote. “Limiting interchange fees makes it likely fewer financial institutions will be able to offer credit cards, or rates will increase just to cover security costs. That means less access to credit for people who need it most.”
Harrington added that the bill’s data security concerns come at a time when fraud rates are rising (doubling between 2011-2021).
“It costs a lot to protect consumers’ information, and interchange doesn’t cover all security measures. It’s not even close. At Minnesota’s credit unions, where we focus on low fees and member service, many credit card programs operate at a break-even point,” she wrote.
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