By JUAN FERNANDEZ CEBALLOS
CEO
Credit Union Association of New Mexico
In New Mexico, we care about community. We look out for our neighbors and come together to support one another. That spirit of community is what brought like-minded community members together to establish the 40 credit unions that serve one million New Mexicans everyday—from providing a mortgage for their first home to cashing their hard-earned paycheck.
Credit unions are part of the communities they serve. They know their members by name. And, as democratically governed financial cooperatives owned by their members who use the products and services offered, credit unions know that many members rely on free and low-cost financial services.
Unfortunately, those services are in jeopardy.
More than a decade ago, the U.S. Congress passed the Durbin Amendment to the landmark Dodd-Frank financial reform legislation. The amendment aimed to help consumers by setting flat rates on the interchange fees retailers pay for debit card transactions and expanding the networks used to process those transactions.
But, in reality, consumers saw no benefits. Large corporate retailers held on to the savings and financial institutions lost money on debit card transactions. A lot of money. So much so that many costs have been passed on to consumers who use debit cards. While most New Mexico credit unions still offer at least one free checking account option, free accounts are practically a thing of the past. Many transactions have a fee associated with them. And penalties for overdrafts and missed minimum balances hurt consumers struggling the most.
The domino effect of the Durbin Amendment has not only made it hard for small, local credit unions to do business, but it has also left 16.5 million Americans unbanked, with no account at a financial institution, and almost 59.4 million who can’t access the financial services they need in their own communities.
Lack of access is counter to the Credit Union philosophy of serving local communities, and we have consistently opposed the Durbin Amendment and sought its repeal.
We are fortunate in New Mexico to have community-minded leaders who understand the devastating impact the Durbin Amendment has had on New Mexico consumers. In fact, even before the effects had begun to be felt, then Reps. Martin Heinrich and Ben Ray Luján spoke out against the amendment and predicted the damage it would cause to families here in New Mexico.
Sens. Heinrich and Luján have always been champions for consumers and communities, and we need to call on them once again to stand up for us.
Right now, the U.S. Senate is considering the Credit Card Competition Act (CCCA), which would extend many of the Durbin Amendment’s failed policies to credit cards. By imposing routing mandates, the CCCA would further cut corners and deprive local financial institutions of the resources they need to extend credit in our communities.
Economists estimate that 10-15 million Americans would be kicked out of the credit system if the CCCA passes. We can’t allow New Mexico families to be knocked down by bad financial policies yet again.
With inflation, rising gas prices and costs soaring at the grocery store, New Mexicans can’t afford another hit to their financial well-being.
We urge Sen. Heinrich and Sen. Luján to continue their record of standing up for New Mexicans and opposing the Credit Card Competition Act. Our communities are counting on it.
