RANCHO CUCAMONGA, Calif.-The full impact of the Durbin rules have yet to trickle down to FIs below $10 billion, but it's coming.

For now, noted Caroline Willard, SVP-business development with CO-OP Financial Services, "We are seeing less than 10% erosion in debit interchange. We have carved out a cohort of credit union debit card issuers and are tracking their interchange volume and revenue, and have yet to see a dramatic decline. I'm not sure how long it will take, but eventually the market will not allow the little guys, the exempt debit card issuers, to win."

Meanwhile, Willard expressed concern over what the CFPB may do to regulate cards, threats from emerging payment types, and the inevitable loss of interchange due to the Durbin rules. Willard noted CUs need to not only develop ways to improve card revenue but to also make sure the credit union has all the payment alternatives members may demand in the coming years.

What is really adding to the uncertainty of the future of payments is the CFBP, emphasized Willard, who said it is unclear if the government agency truly understands the cards market. "We are all watching what the CFPB will do with actions that could possibly dampen the cards market, since the CFPB is going to be very consumer friendly...I expect a lot more paternalistic practices and policies along the lines of what we have seen with overdraft." For info: www.co-opfs.org

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