May 15, 2014

Court mandate in effect: Fed interchange rule stands

May 16, 2014 – The March 21 federal appeals court decision to uphold the Federal Reserve's debit interchange rule is now effective with the court's recent posting of its mandate.

Although the merchants did not request a rehearing from the court by the deadline of May 5, they still have the option to file a petition for certiorari to seek review by the Supreme Court. The deadline to file that petition is June 19. NAFCU will remain vigilant as developments on the interchange issue continue.

The U.S. Appeals Court for the District of Columbia Circuit in March overturned a lower court decision regarding the Federal Reserve's debit interchange rule – a move which averted the district court decision's potentially disastrous impacts on credit unions. As it stands, the current Federal Reserve interchange rule imposes below-cost caps on interchange fees and fails to provide for a reasonable return. The current rule caps charges to retailers at 21 cents per debit card transaction.

After the appeals court decision in March, NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt called the decision a win for credit unions in a video message to members, but added that the association still views the Fed's debit interchange fee cap as too low and that it "will continue to advocate on behalf of our members and for preserving credit union interchange fee income."