Durbin Fires Back, Says Fee Cap A Victory For Consumers
WASHINGTON-Sen. Dick Durbin, who led the effort to cap debit interchange fees last year, responded to the banking and credit union lobbies' letters to Congress last week, saying the cap has resulted in a victory for consumers.
In a letter to the American Bankers Association, the Illinois Democrat wrote, "Main Street businesses all across America that were previously being crushed by ever-rising debit swipe fees are now seeing real relief."
Durbin refuted conclusions by the ABA, CUNA and NAFCU in separate letters to Congress, writing, "Many consumers have been able to receive discounts for buying products such as gasoline and airline tickets with their debit cards, and many more have benefited as merchants have been able to keep prices down as a result of lower interchange costs. Far from being a mistake, debit interchange reform is showing real results."
Court Dismisses Another Suit Over Debit Transactions
SAN FRANCISCO-A federal court here has agreed to dismiss a member's suit claiming Star One CU violated consumer laws by reordering debit transactions, the seventh overdraft suit dismissed out of a total of nine filed against SOCU since April. It was the fifth of six CU overdraft suit dismissed in California, four by the same San Jose lawyer, Fernando Chavez, who has one more overdraft suit pending, this one against Alliant CU. In all four cases, Chavez moved for voluntary dismissal, even before the CU launched a defense.
1,000 Are Already Signed Up
MADISON, Wis.-CUNA Mutual Group is reminding people to register for its third annual, day-long Online Discovery Conference on Tuesday, Oct. 9, when 13 CU-focused sessions will be offered online for free. Approximately 1,000 people are already registered. For more info: www.cunamutual.com/discoveryonline/PR.
League Makes Exec-Level Changes
ONTARIO, Calif.-The California/Nevada CU League, which recent terminated several longtime executives as part of a reorganization, has filled several of those vacancies, some with former credit union CEOs.
The League has named Tony Kitt, former CFO at WesCorp, as SVP-strategic innovation and planning. Alta Vista CU President Larry Palochik was named SVP-member solutions, which encompasses all member-facing services. In addition, Lynn Athens, former CEO of Spectrum FCU in San Francisco, has been named VP-HR and Collaborative Office Solutions, while Joe Keller, who was VP of digital media at WesCorp, was named VP of digital media and C-Sun Studios.
Finally Rodney Wilson has joined the Leagues as state legislative and regulatory lobbyist after previously serving as legislative director for Assemblywoman Betsy Butler (D-LA).
Suit Filed Over GAP Product
TALLAHASSEE, Fla.-A member of FLAG CU has filed suit in federal court claiming CUMIS Insurance, a unit of CUNA Mutual Group, is violating Florida law in its sale of guaranteed asset protection, or GAP, contracts. In his purported class action suit, Horace Walters alleges the GAP contracts CUMIS sells to credit unions are deceptive, because CUMIS actually insures the contract with each credit union, and therefore has unstated motives in determining payouts for GAP.
In Walters' case, he financed the June 2009 purchase of a 2008 Honda Accord with the Tallahassee credit union and took out a GAP contract with CUMIS for a $225 fee. In January 2012 he got in a major accident and totaled the car. The loan balance on the vehicle was $14,564. His insurer, Allstate, paid $8,393 to the credit union for the value of the car, leaving a gap of $6,170. FLAG CU filed a claim with CUMIS for the balance but the claim was denied because CUMIS reduced the claim by $1,680 for "wear and tear" and by an additional $8,239 for "title history."
As a result, Walters still owes $6,170 on the car, which was totaled.