New hearing Aug. 21 on Fed interchange rule
Aug. 14, 2013 – Federal Judge Richard Leon has scheduled a new hearing in the debit interchange suit for Aug. 21, during which the Federal Reserve will be expected to discuss whether to issue an interim final rule to correct the debit interchange rule that was recently vacated.
Additional briefs are due Aug. 28 on this issue, and parties in the amicus filed in this case, including NAFCU, will be able to submit their views, said NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt. She said there will be another hearing in September on whether card issuers will be required to issue any refund of previously assessed fees. "This issue has not been raised before in this case," Hunt noted, "and we will present strong legal arguments as to why it is not germane."
Hunt will be the focus of a video message later today explaining the ins and outs of what is to come.
In a July 31 opinion, Leon vacated the Federal Reserve’s debit interchange fee regulation, which caps transaction fees at 21 cents and sets rules on network exclusivity. The fee cap applies to institutions with more than $10 billion assets. Leon has stayed his order vacating the rule but said he doesn’t expect that to continue indefinitely.
NAFCU has been 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.
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).