Federal Reserve Board to appeal interchange decision
August 22, 2013 – The Federal Reserve Board told Federal Judge Richard Leon, who struck down the Fed Board's interchange rule on July 31, that it filed an appeal of the court's decision yesterday.
The Fed Board, represented by General Counsel Scott Alvarez at the hearing, also stated that it filed an expedited appeal and requested a stay of the court's decision pending the appeal. Leon continued the current stay of the July 31 decision until he decides whether or not to grant the stay and ordered parties to file pleadings by Aug. 28.
Carrie Hunt, NAFCU's senior vice president of government affairs and general counsel, attended the hearing. She said "We fully support the decision to appeal."
Hunt is the focus of a video message 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 in assets. However, 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.
Additional briefs are due Aug. 28 on the issue of whether to issue an interim final rule and related matters, amici in this case, including NAFCU, will be able to submit their views.
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.
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