The Federal Reserve will have another opportunity on Wednesday to declare how it will replace parts of its rule on debit interchange that a federal judge invalidated three weeks ago.
U.S. District Court Judge Richard Leon threw out both the cap on debit interchange for debit card issuers of more than $10 billion in assets and the network competition provisions in the rule, declaring in his July 31 decision that the regulator had not sufficiently followed the law when it wrote the first rule.
Only four credit unions are covered by the interchange cap, but all credit unions have to comply with the rule's network competition provisions.
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 had expected the Federal Reserve to propose how it would replace those parts of the debit rule at a hearing on Aug. 14, but angrily gave the Fed another week when they came to that hearing unprepared.
The Federal Reserve has not announced whether it would appeal Leon’s July 31 ruling.
Both sides have until Aug. 28 to file briefs on whether the court can order damages paid and what they should be.
- Judge Throws Out Fed’s Debit Cap
- CUNA, NAFCU Assail Ruling
- Ruling Could Force CUs to Add Processors
- Aug. 14 Hearing Set on Cap Ruling
- Financial Researchers Rate Chances of Appeal
- Judge Gives Fed One More Week
- Doubts Whether CUs Would Pay