Hunt, in video, notes interchange win, next steps
March 24, 2014 – Friday's federal appeals court ruling to overturn Judge Richard Leon's rejection last July of the Federal Reserve's debit interchange rule averts potentially disastrous impacts on credit unions, NAFCU's Carrie Hunt said in a new video.
"Today, the appellate court gave a resounding opinion that they thought the lower court got it wrong and that the Fed was reasonable in putting out the rule that it did," said Hunt, NAFCU's senior vice president of government affairs and general counsel.
Hunt added, however, that NAFCU 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."
Under Friday's ruling by the U.S. Appeals Court for the District of Columbia Circuit:
- The Fed Board's interchange fee cap stands. Issuers can recover some costs in addition to incremental authorization, clearance and settlement costs.
- The board's non-exclusivity provisions also stand. Credit unions do not have to have two networks for signature and two networks for PIN.
- The Fed Board must provide more information regarding transaction-monitoring costs.
The appeals court, in Friday's ruling, described the rule's underlying statutory language, contained in the Durbin amendment in the Dodd-Frank Act, as confusing and called its structure "convoluted.
As for next steps, Hunt said merchants and their trades could seek a rehearing from the appeals court or could ask the Supreme Court to hear the case. However, she said the appeals court "used longstanding principles of law in its decision" and said NAFCU would remain vigilant.
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