Credit-union and bank groups plan to file a brief as early as March 7 asking a federal court to block implementation of the debit-interchange fee provisions of the Dodd-Frank Financial Reform Act.
The friend-of-the-court brief by Credit Union National Association, the National Association of Federal Credit Unions, the American Bankers Association and the Independent Community Bankers of America backs a lawsuit TCF Financial Corp. filed in October challenging provisions of the so-called Durbin amendment to the act that will set caps on interchange fees collected by card issuers (
The amicus brief cites problems with the Durbin amendment, including the directive that the Federal Reserve set “reasonable and proportional rates” on interchange, that the language does not allow for all reasonable costs incurred in setting the allowable fees, and that the requirements on routing and exclusivity are problematic, according to Mary Dunn, Credit Union National Association senior regulatory lobbyist.
In its suit filed, TCF claims the Durbin amendment illegally interferes with the $18 billion bank’s activities in a market that has been competitive and open by imposing unconstitutional limitations on the ability of TCF and other financial institutions to recover their costs for providing a service crucial to bank depository customers today.
Meanwhile, the legal volleying in the TCF lawsuit continued March 4 with the Wayzata, Minn.-based 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 TCF’s lawsuit 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.
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