April 4, 2011

Save Your 4% Free Checking!

We need your help. Recently, Congress passed the Durbin Amendment to the Financial Reform Act which pertains to debit card interchange.

Pending legislation needs to be delayed. Debit card interchange is a small cost that merchants pay when they accept debit card transactions. As a debit card issuer, Lake Michigan Credit Union earns interchange income each time you use your debit card. Interchange income covers the cost of processing debit transactions – including the electronic processing involved in approving the transaction and funding your purchase from your account, other operational costs, and fraud risks. 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 CheckingSM 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.

Many members of Congress agree with credit unions and banks who wish to delay the pending legislation so that Congress can thoroughly understand the full impact of this legislation. Two amendments have been introduced to delay the Durbin Amendment legislation, S. 575 (Senate) and H.R. 1081 (House of Representatives). LMCU and credit unions across the country endorse these two amendments to stop the interchange legislation.

Here’s how you can help.
Please contact your U.S. Congress House of Representative and Senators Levin and Stabenow and encourage them to support these amendments – S. 575 and H.R. 1081. You can also visit SaveMyFreeChecking.com for additional information and sample letters. Calling, sending an email and/or letter will help these favorable amendments pass and help save your free Max Checking account.

Thank you for your support.

Sandy Jelinski
Lake Michigan Credit Union

*APY = Annual Percentage Yield.


Anonymous said...

I have already signed a petition put out by someone else regarding this. This fee is not right.

Dave Gorman said...

Debit cards were introduced in the late 80s as an alternative to the high cost check processing. They afforded consumers convenience, a lower cost, an ability to get cash back. They afforded merchants funds authorization, quicker availability, an ability to decrease their cash on hand and all at the fee of a deposited check.
Financials ratcheted up fees, forced consumers to sign vs PIN transactions to increase their fee income from merchants. Concurrently, financials were selling merchants on putting in POS debit terminals to take advantage of the increasing consumer wave and save money of higher interchange fees on credit cards.
Bottom line, consumers won, financials won. Merchants lost!!
Fed proposed reducing the fee from roughly $.44 to $.12 It isn't that financials can't cover the cost, they just don't want to lose all that revenue.

Anonymous said...

The Max Checking is appreciated and has been a very good opportunity to encourage members to save while monitoring their accounts. It is essential that we, as members, use the information provided and get involved! I switched from a bank to the LMCU over 30 years ago and have enjoyed the services membership affords. I will be sure to do my part to notify congress not only to delay, but to reverse the Durbin Amendment.

Anonymous said...

It is my understanding the legislation exempts "small banks"; those with less than $10 billion in assets.

LMCU said...

The cards from smaller institutions would then be significantly more expensive, and merchants would be able to discriminate against those cards – ultimately forcing smaller issuers out of the market and further consolidating debit to only the largest institutions.

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