NAFCU's Hunt at interchange suit status hearing today
NAFCU's Carrie Hunt will attend today's status hearing on the interchange fee suit.
Aug. 14, 2013 – Carrie Hunt, NAFCU’s senior vice president of government affairs and general counsel, will attend today’s status hearing with federal Judge Richard Leon on what’s next for the Federal Reserve’s debit interchange fee regulation, which Leon overturned July 31.
Leon, in his July 31 opinion, stayed his order but said he anticipated that stay remaining in place “for months, not years.” In his opinion, he said two issues remain: the appropriate length of the stay; and whether current standards should remain in place “until they are replaced by valid regulations or the Board should develop interim standards sufficient to allow the Court to lift the stay.”
This suit was filed in 2011 by merchants and merchant groups, which claimed the Fed set the federal debit interchange fee cap, called for by the Dodd-Frank Act, too high and based on too many factors. NAFCU, with other financial industry trades, filed an amicus brief supporting the Fed’s rule (which NAFCU believed set the fee too low).
Leon’s ruling faults both the fee cap in the rule and the Fed’s provisions addressing network exclusivity. All debit card issuers, regardless of size, are expected to be affected by both loss of interchange fee income and huge costs ahead to make necessary changes to payment networks.
The Fed’s fee cap applies only to institutions with more than $10 billion in assets. NAFCU has warned that smaller issuers will be affected over time as market forces take over.
NAFCU is in contact with NCUA, the Fed and lawmakers on the ruling’s impact on credit unions of all sizes. NAFCU President and CEO B. Dan Berger has written the House Financial Services and Senate Banking Committees to urge them to be ready to act expeditiously if needed to mitigate that impact.
July 31 opinion