The Federal Reserve Board and Office of the Comptroller of the Currency are asking a federal judge to dismiss TCF Financial Corp.'s lawsuit, which seeks to block implementation of the Durbin amendment.
In a motion filed Friday in U.S. District Court for South Dakota, the defendants moved for the suit to be dismissed for failure to "state a claim upon which relief can be granted" and lack of subject matter jurisdiction.
TCF filed its lawsuit in October seeking to stop implementation of the Durbin amendment, which as part of the Dodd-Frank Act instructed the Fed to set debit card interchange rates that are reasonable and proportional to issuers' costs. The Wayzata, Minn., banking company argued that the amendment imposed "unconstitutional limitations on the ability of TCF and similarly situated banks to recover their costs for providing" debit card services to customers. In December, the Fed proposed limiting the fees to 12 cents per transaction, compared with a current average of 44 cents.
In their memorandum supporting a motion to dismiss, the Fed and OCC said that TCF failed to identify any statute, regulation or contract that guarantees it should receive the current level of debit interchange. They also said that under U.S. banking code, TCF is barred from seeking injunctive relief to block an enforcement action by a banking agency — in this case the OCC.
