Judge Delays Interchange Cap Rejection by a Week
An irate U.S District Judge Richard Leon threw the Federal Reserve another curve ball on Wednesday when he gave the Federal Reserve another week to tell him why he should not throw out the 21-cent interchange debit cap immediately.
The judge had stayed his July 31 decision lifting the cap and invalidating the Federal Reserve's debit network rules until Wednesday and he chastised the agency for not being ready to discuss when it could have a new rule in place.
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The National Association of Convenience Stores and other merchants and associations had sued the Federal Reserve to overturn the debit interchange regulation which they argued did not reflect the language or intent of the Durbin Amendment to the Dodd Frank law. Leon agreed with them in his July 31 decision.
“The Fed does not have the luxury of weeks to come up with a decision. I would have thought this would have been a priority matter,” Leon told the Fed attorneys. “They can come back from Nantucket or off vacation to deal with this, or do it by conference call.”
He also raised the possibility of damages for the money “overcharged” merchants under the Fed's previous rule, a topic which also appeared to catch the plaintiff's attorney unprepared.
The Federal Reserve and attorneys for the plaintiffs and financial institutions have until Aug. 28 to file briefs on whether or not the court can order damages paid and what they should be.
He set a hearing to hear arguments on that question for Sept. 16.