Your debit or credit card transaction goes something like this: You buy something at a retailer, either online or in your hometown, and you go to pay with your card. Your payment gets split, with a tiny percentage going to Visa or MasterCard, and the rest going to the merchant.

But now Congress is looking to change the whole system in a way that hurts E&A Credit Union and other financial institutions.

Merchants pay a fee for the privilege of using Visa/MasterCards payment infrastructure. That's called interchange. Visa and MasterCard pay card providers, like E&A, a bit of that interchange for being a part of their system.

Everyone wins. The merchant gets an ease-of-use system for payments, Visa gets some income from the merchant, and we, as a credit union, get a fraction of that income for providing the debit or credit cards. Interchange is great because it helps credit unions of all sizes to issue debit and credit cards. We see interchange as a merchant's fair share of the costs of this convenient system.

But it's more than just convenience. Merchants, the ones taking the Visa or MasterCard payment, pay a small fraction for this service and reap most of the benefits, all while assuming none of the risk. E&A has to cover the costs for fraud, card errors, and serving debit and credit card accounts. All the while, merchants benefit from the increased purchasing power such card systems provide. When you have a Visa account, for example, it's easier to pay for more and bigger stuff. The merchant gets all that income, and only has to pay a small, single-digit percentage back to card issuers to maintain the system.

If credit unions like E&A didn't provide debit and credit cards to our members, imagine what would happen to local businesses. Or online retailers. Now think about all the other credit unions and banks across the nation. We all have to provide debit and credit cards, and providing that system costs money. The only way we can pay for this convenient system is to charge a fair interchange fee.

Now, Congress is looking to change the interchange fee structure, which means E&A and other card providers could get less income for providing debit and credit cards. If this happens, our debit and credit card system could cost you, the member, more.

If interchange were reduced and could no longer adequately support E&A's card system, you, as members, may end up paying more to use your debit and credit cards, or we may no longer be able to offer cards at all. Members of Congress should oppose merchants' proposals to reduce interchange.

So we're fighting back. We are asking our members to send an email to Michigan's senators, Carl Levin and Debbie Stabenow, and tell them we don't want any reduction in interchange income.

We thank you for your help and support with this issue. We always strive to provide the best products and services so that you, the member, can enjoy a better financial way of life.

Sincerely,

Janice Rose
President & CEO