What is the Interchange Amendment Legislation? How does it affect the CU member?
Interchange Amendment in the Senate Financial Services Reform Bill:
Recently the United States Senate passed the Financial Services Reform bill
and sent it to a conference committee to iron out differences in their
respective bills. While financial reform to our system is important, there
are still parts of this legislation which will negatively affect credit unions
and their members. Specifically, an amendment which would place a
government imposed cap on the amount merchants pay to support the
system that allows you to use your debit card at their establishments.
As a credit union, interchange gives us the income we need to run our debit
card programs. We assume the risk for many aspects of our card programs,
such as fraud and data security. The merchants assume none of these
liabilities. Contrast this to the day when checks were the most frequently
used form of payment. Merchants where left holding the bag for bounced
checks. Today, with debit cards, the merchant has little to worry about and
they get paid immediately. When financial data is compromised, it is not
the merchant that bears the cost of replacing cards, it is the financial
institution.
We do not set the interchange rate. However, if the rate becomes too low
we will be forced to either discontinue offering card services or impose
other fees to cover costs. Small merchants, like credit unions, are caught
up in a much bigger game. The merchants’ coalition is being headed up by
the big box merchants who stand to gain a windfall with reduced rates.
We are asking you to take a moment to call your Member of Congress
about the interchange amendment and stress to him or her the importance
of removing the interchange amendment language from the final
Financial Services Reform bill. Call toll-free 1-877-223-5275.
Back to Top
What is a Credit Union?
A credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to members. It is member-owned and controlled through a board of directors elected by the membership. The board serves on a volunteer basis and may hire a management team to run the credit union. The board also establishes and revises policy, sets dividend and loan rates, and directs certain operations. The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution which exists to benefit them, not to make a profit.
Back to Top
Who owns a credit union?
Most financial institutions are owned by stockholders, who own a part of the institution and intend on making money from their investment. A credit union doesn't operate in that manner. Rather, each credit union member owns one "share" of the organization. The user of credit union services is also an owner, and is even entitled to vote on important issues, such as the election of member representatives to serve on the board of directors.
Back to Top
How did credit unions start?
The first credit union cooperatives started in Germany over a century ago. Today, credit unions are found everywhere in the world. The credit union movement started in this country in Manchester, New Hampshire. There, the St. Mary's Cooperative Credit Association, a church-affiliated credit union, opened its doors in 1909. Today, one in every three Americans is a credit union member.
Back to Top
What is the purpose of a credit union?
The primary purpose in furthering their goal of service is to encourage members to save money. Another purpose is to offer loans to members. In fact, credit unions have traditionally made loans to people of ordinary means. Credit unions can charge lower rates for loans (as well as pay higher dividends on savings) because they are nonprofit cooperatives. Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends or improved services.
Back to Top
Are savings deposits insured and are they safe?
Yes. All savings accounts are insured to at least $250,000 by the NCUA (National Credit Union Administration) and backed by the full faith and credit of the United States Government
Back to Top
Who can join a credit union?
A credit union exists to serve a specific group of people, such as a group of employees or the members of a professional or religious group. This is called a "field of membership." The field of membership may include where they live, where they work, or their membership in a social or economic group.
Family Savings FCU is a community chartered credit union. Therefore, anyone that lives, works, worships or attends school in Etowah County, AL or the Northwest Georgia 10-counties of
Back to Top
