Court Ruling Creates Three-Way Race On Debit Rule

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SIOUX FALLS, S.D. – A U.S. appellate court has approved Minnesota’s TCF Bank’s request for an expedited appeal of a lower court ruling denying a bid to block the Federal Reserve’s final rule on interchange charges, setting up a three-way race between the courts, the Fed and Congress on the controversial effort to limit the lucrative fees.


In its ruling, the U.S. Court of Appeals for the Eighth Circuit required the $15 billion bank to submit its brief by April 28 and the Fed to respond by May 12, with TCF given until May 23 to reply. Oral arguments would be held in June.


The court schedule brushes closely against a July 21 deadline for the Fed to implement a final rule.


Meantime, TCF and the other banks, along with credit unions, are lobbying Congress to delay the impending deadline to allow the Fed up to two years to study the interchange issue.


The appeals court schedule is likely to conflict with the Fed’s own timetable, which will include approving a final rule prior to the implementation date, so as to give banks and credit union proper lead-in time to plan for implementation.


The banks and credit unions are fighting over some $20 billion in debit fees they earned last year, which the Durbin amendment to last year’s Wall Street reform bill would cut by as much as two-thirds. The fees were especially lucrative for credit unions, who earned an estimated $2.6 billion in interchange in 2010, according to CUNA.


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