CUNA, NAFCU and several bank groups are asking a federal judge if they can file a friend-of-the-court brief on behalf of a bank that is challenging the constitutionality of the law, giving the Federal Reserve the power to regulate interchange.
The groups asked a federal judge in South Dakota for permission to file an amicus curia brief in the lawsuit against the Federal Reserve filed by TCF National Bank, based in Wayzata, Minn.
The groups filed the request on Friday and hope to hear back this week.
“We won’t be a party to the case but we will hopefully be listened to because our members will be negatively impacted by the rule,” CUNA Senior Vice President and Deputy General Counsel Mary Mitchell Dunn said today.
The bank contends that the provision of the financial overhaul bill giving the Fed the power to regulate debit interchange fees is unconstitutional because it is an unlawful taking of property. It also argues that it is discriminatory because it does not impact smaller debit card issuers in the same way and because it does not impact all players in the payment system equally.
The Justice Department has filed a motion seeking that the lawsuit be dismissed.
According to the proposed rule, the allowable costs for interchange would be limited to no more than the issuer's allowable costs divided by the number of electronic debit transactions on which the issuer received or charged an interchange transaction fee in the calendar year. Or the issuer could receive debit interchange capped at 12 cents per transaction.
Comments on the Fed’s proposed rule were due on Feb. 22. Unless Congress acts to delay the implementation, the rule must be approved by April 21 and in effect by July 21.