TCF Counters Government Motion in Anti-Durbin Case
Bankers upset with a proposal to slash debit interchange fees are lobbying Congress and plotting survival strategies. Only TCF's Bill Cooper has been bold enough to take the Federal Reserve to court.
The big banks, whose behaviors brought about the Dodd-Frank Act, are the losers here and will have to reprice. The winners are merchants who get the benefit of lower interchange costs.
The head of TCF Financial Corp., which sued the Federal Reserve Board in October to challenge its debit card interchange fee caps, said growing opposition to the proposal may help his case.
The legal volleying in TCF Financial Corp.'s lawsuit to block the Durbin amendment continued Friday with the Wayzata, Minn., banking company filing documents in federal court to counter regulators' opposition.
In a legal brief, TCF argues that the government failed to justify why its suit should be tossed.
The Federal Reserve Board and Office of the Comptroller of the Currency last month filed a motion opposing a suit TCF filed in October in U.S. District Court for South Dakota. The regulators argued that TCF failed to "state a claim upon which relief can be granted" and lacked subject matter jurisdiction. They also claimed that the harm TCF has said it expects to incur from the Durbin amendment is speculative.
In December, the Fed proposed limiting interchange fees that banks earn when consumers use debit cards to 12 cents per transaction compared with a current average of 44 cents. The Fed is required to issue final rules by April 21. The rules take effect July 21, though some regulators and legislators have called for the Fed to delay its implementation to further study their impact.
TCF has said it expects its annual interchange revenue to drop from $102 million to $20 million after the Fed's rules take effect.
A hearing on TCF's motion for a preliminary injunction against the interchange caps is scheduled for April 4 in South Dakota.