Oct. 2, 2012 – A coalition made up of NAFCU and eight other financial industry trades will have its views aired in a hearing for oral arguments today in the merchants’ suit against the Federal Reserve Board’s debit interchange rule.
The National Association of Convenience Stores is the lead plaintiff in the suit, which criticizes most aspects of the Fed’s final debit interchange rule, including provisions on the transaction fee cap and network exclusivity rules. Sen. Richard Durbin, D-Ill., the author of the underlying statutory language in the Dodd-Frank Act, filed an amicus brief supporting NACS’ argument.
The coalition brief supports neither the Fed nor the merchants; instead, the groups argued that the fee cap set by the Fed rule, 21-22 cents per transaction, will not cover the costs institutions incur for providing a service that essentially guarantees merchants full payment before any fraudulent or nonsufficient funds activity is known.
NAFCU has also argued that the exemption in the rule for institutions with less than $10 billion in assets will not do what was intended over the long term given market pressures to level debit interchange fees across the board. NAFCU detailed this concern and presents data bearing it out in its October Economic and CU Monitor.
NAFCU General Counsel and Vice President of Regulatory Affairs Carrie Hunt is attending today’s hearing.
The suit is in the U.S. District Court for the District of Columbia. The coalition is represented by Wilmer Cutler Pickering Hale and Dorr LLP. Coalition partners include NAFCU, CUNA, The Clearing House Association L.L.C., American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America and Midsize Bank Coalition of America.