PIERRE, S.D. – TCF Financial agreed yesterday to dismiss its suit challenging the Federal Reserve’s cap on debit fees, but said it may decide to come back with a subsequent challenge later on after it reviews the Fed’s final rule.
“We may come back. We’ll have to take a look at it and put it together,” Jason Korstange, a spokesman for the $19 billion Twin Cities Financial, told the Credit Union Journal yesterday.
In its suit–supported by CUNA, NAFCU and the banking groups–TCF said the December proposal by the Fed would have cut its annual debit fees from $100 million to around $18 million, and challenged the proposal as unconstitutional under the “takings” clause of the U.S. Constitution.
“While we continue to believe that the Durbin Amendment is unconstitutional because it requires below-cost pricing and exempts 99% of all U.S. banks, we believe our lawsuit has served its purpose in demonstrating the unfairness of the Durbin Amendment and that it is time for us to move on,” said William Cooper, TCF president and CEO. “The Federal Reserve Board’s final rule is an improvement from its initial proposal and recognizes many of the points we made in our case.”
TCF’s last-ditch request to block the Fed’s rule with a temporary injunction was rejected Thursday morning by the U.S. Court of Appeals for the Eighth Circuit, just hours before the Fed voted its final rule.
The Fed’s final rule will set the cap on debit fees for institutions over $10 billion at 21 cents per transaction, plus 0.5% of the transaction for fraud related expenses, significantly higher than the 7 cents or 12 cents originally contemplated by the Fed.
