Appeals court upholds Fed on interchange
March 21, 2014 [UPDATED] - NAFCU today hailed the overturning of the lower court decision by a federal
appeals court regarding interchange.
NAFCU's Carrie Hunt
“NAFCU is pleased with the appeals court’s decision as it mitigates the harm that would have been done by the district court ruling. We still believe that the Fed’s rule is flawed,” said Carrie Hunt, NAFCU’s senior vice president of government affairs and general counsel. “NAFCU will continue to advocate for credit unions’ interests and abilities to receive income on card services and recover costs incurred in transactions.”
The current Federal Reserve interchange rule imposes below-cost caps on interchange fees and fails to provide for a reasonable return.
The federal appeals court, however, did remand one issue in its decision: The Federal Reserve Board’s treatment of transaction-monitoring costs. The court asked the Board for further explanation. NAFCU will continue to advocate credit union interests as they relate to the transaction monitoring costs.
The district court last year said the interchange rule was invalid under the Dodd-Frank Act but stayed that decision pending appeal. NAFCU and amici supported the appeal.
NACS v_ FRB Court of Appeals Decision, 3-21-14