March 24, 2014

Compliance Blog details interchange win

March 25, 2014 – NAFCU's Complance Blog yesterday detailed the NAFCU-sought win in the debit interchange suit, in which the U.S. Court of Appeals for the D.C. Circuit overturned most of Judge Richard Leon's district court ruling from last July.

"After going through several levels of legal and grammatical analysis, the court held that the Federal Reserve crafted a rule that largely fell within the constructs of the Durbin Amendment," NAFCU Regulatory Compliance Counsel Ricardo Piñeres wrote of Friday's ruling. "[After] this analysis and quoting from such classics as E.B. White and William Strunk's 'The Elements of Style' and Lynn Truss's 'Eats, Shoots & Leaves,' the panel held that the Federal Reserve was within its right to include more than just the variable costs."

NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt said last week that NAFCU still views the Fed's debit interchange fee cap as too low and that "will continue to advocate on behalf of our members and for preserving credit union interchange fee income." The fee cap applies directly only to institutions with $10 billion or more in assets, but market forces are expected to drive fees down for all issuers over time.

As noted previously, merchants and their trades could seek a rehearing from the appeals court or could ask the Supreme Court to hear the case. NAFCU will remain vigilant.