Hunt outlines next steps on interchange
Aug. 15, 2013 – Counsel for the Federal Reserve is expected to produce details Aug. 21 on whether it believes an interim rule on debit interchange is feasible now that the court has vacated the Fed's current rule, Carrie Hunt, NAFCU senior vice president of government affairs and general counsel, reported yesterday.
Hunt, in a video report to the association's members, said federal Judge Richard Leon has been and remains highly critical of the Fed for the rule it wrote in implementing the Durbin amendment of the Dodd-Frank Act. Most involved in this case expected Wednesday's hearing would address scheduling to brief two remaining issues in the case: the appropriate length of stay of his opinion vacating the rule; and whether current standards should remain until they are replaced by "valid" rules or the Fed issues an interim final rule. But Leon appeared interested only in hearing substance on whether the Fed should issue an interim final rule.
His July 31 opinion essentially calls the Fed's current rule illegal, Hunt notes in the video. She said if the court's ruling is not appealed, or if it is upheld on appeal, the Federal Reserve Board will be required to make extensive modifications to its final rule in order to satisfy the court's interpretation of the Dodd-Frank Act. This applies to the debit interchange fee cap and non-exclusivity requirements.
Leon said the stay of his order will remain in place until the next conference, set for 2 p.m. Eastern Aug. 21. He has ordered Fed Board General Counsel Scott Alvarez to appear.
Leon has meanwhile set two briefing dates following next week's conference:
- Aug. 28: Briefs on an interim rule are due to be submitted by this date. Parties to the amicus brief filed in this suit – including NAFCU – will be able to file.
- Sept. 16: Briefs on the issue of remedy – whether card issuers with $10 billion in assets or more will be required to refund debit interchange fees collected under the current rule – are due.
Hunt reiterated that the issue of remedy has not arisen in this case before and anticipates strong legal arguments would be made against such a result. The court will permit amicus briefing on this issue.
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