Law and regulation

Federal Bank Ltd. on Jan. 26 became India’s first debit card issuer to stop charging its customers who use other banks’ ATMs, regardless of how many times they do so, a spokesperson for the Kochi-based bank tells PaymentsSource.

An estimated 426 different collection agencies and creditors were sued under consumer statutes in the first half of January, up from 392 in the second half of December but down from 510 in the fist half of December, according to data from U.S. district courts.

The treasurer of Australia reportedly has launched a probe into the fees ATM providers are charging at machines deployed in the Australian outback.

Contrary to what debit card issuers claim, merchants do not want a “free ride” on debit card interchange, contends a prominent convenience-store owner who has spent years lobbying for changes in payment card interchange-rate policies.

WEST DOVER, VT.–Their silence on the Federal Reserve Board’s proposal to regulate debit card interchange rates could be counterproductive for independent sales organizations and merchant acquirers, Holli Targan, president of the Electronic Transactions Association, told attendees here at the Northeast Acquirers Association conference.

The Consumer Law Group, a multi-state law firm that specializes in debt management and debt settlement, is suing the Florida Attorney General's office, claiming it does not have the authority to investigate its business practices because "the practice of law does not constitute 'trade or commerce' as defined by the Florida Deceptive and Unfair Trade Practices Act [FDUTPA]."

Washington state regulators, citing consumer protection law violations, have ordered payday lending giant Checkmate to drop its new gift card program.

JPMorgan Chase & Co.’s Chase Bank USA unit does not have to battle a slew of class-action lawsuits alleging it improperly increased credit cardholders’ interest rates, the U.S. Supreme Court ruled Jan. 24.

WASHINGTON – The Federal Reserve’s proposal to slash interchange fees on debit transactions by as much as 70% could devastate the finances of some credit unions, forcing them to institute fees on no-charge services such as checking, credit unions are telling the Fed.

Citing the effects of fewer losses and healthy growth in new accounts and purchase volume, Capital One Financial Corp.’s credit card unit earned $586 million during the fourth quarter ended Dec. 31, up 14.9% from $510 million a year earlier. Revenues were down 13.8%, however, to $2.5 billion from $2.9 billion, driven by a full quarter of lower late fees resulting from implementation of the CARD Act, Cap One reported Jan 20.

A Georgia woman will be allowed to sue debt collector I.C. System for interest fees she paid on veterinary bills, a three-judge appellate panel has ruled, reversing a federal judge's 2009 decision.

Proposed limits on debit card interchange fees should have a neutral to positive impact on eBay Inc.’s PayPal Inc. operations, at least in the short term, Bob Swan, eBay chief financial officer, told analysts Jan. 19 during a conference call to discuss fourth-quarter earnings.

WASHINGTON — The banking industry is mounting an assault on multiple fronts to weaken, stall or repeal the restrictions on debit interchange fees championed by Sen. Dick Durbin in the Dodd-Frank Act before the policy goes into effect this summer.

The head of TCF Financial Corp., which filed a lawsuit against the Federal Reserve Board in October challenging its proposed debit card interchange rate cuts, said Jan. 20 that growing opposition to the proposal may help his case. The effort is part of a multi-pronged attack from banks on the debit interchange restrictions (see story).

The Bangko Sentral ng Pilipinas, the Philippines central bank, has issued new regulations designed to further protect the country’s credit cardholders from abuse.

The Durbin amendment carved out smaller banks from its mandate to restrict debit swipe fees, and at least one of the major networks is willing to oblige, but equity markets do not appear to have cut the group much slack.

Addressing analysts Jan. 19 during a conference call to discuss fourth quarter earnings, Dan Poston, chief financial officer at Fifth Third Bancorp, noted it is too early to predict how the bank will react to reductions in debit card interchange revenue.

U.S. Bancorp had expected to wait to see how other financial institutions reacted to recent legislative and policy changes that have or will affect revenue before deciding on the course of action it takes.

WASHINGTON – In a rulemaking process turned upside down, credit unions and community banks exempt from the Federal Reserve Board’s proposal limiting debit card interchange fees are dominating the comment process, while the big institutions coming under the rule have yet to weigh in (see story).

Defendants that the Federal Trade Commission alleged stole millions of dollars from consumers through unauthorized charges and debits to bank accounts have reached settlement agreements with the FTC.