PIERRE, S.D. – Minnesota’s TCF Bank asked a federal appeals court yesterday to order the Federal Reserve to provide the court with an advanced copy of the Fed’s final debit rule to be voted next week, in order to help the court deliberate over the bank’s suit to stop the rule.
The extraordinary request comes as the bank is asking the court to block the Fed’s final rule, which it calls unconstitutional. TCF, which stands to lose $80 million a year in debit fees if the final rule is similar to the December proposal, claims the diminished revenue would constitute a “confiscatory taking” under the commerce clause in the U.S. Constitution.
In yesterday’s filing TCF, formerly Twin Cities Financial, asked the U.S. Court of Appeals for the Eighth Circuit to order the Fed to furnish the court immediately with an advance copy of its final rule in camera, or confidentially, with no copy being seen by TCF. An advance look at the final rule will help the appeals court to decide whether the rule could still be considered “confiscatory,” the TCF lawyers told the court.
The Fed is scheduled to vote next week on the final rule to implement provisions of last year’s Wall Street reform bill setting a cap on debit fees earned by banks and credit unions. The stakes in the battle are enormous, with credit unions and banks earning an estimated $20.5 billion a year in debit fees, $2.6 billion of it by credit unions.
As a result, the TCF suit is being backed by CUNA, NAFCU, the American Bankers Association and other banking groups who see it as the last chance to stop final implementation of the debit cuts, scheduled for July 21.
