There is now no doubt the Federal Reserve's debit interchange rule will remain in place until an appeals court rules on the initial decision doing way with two-thirds of it.
Judge Richard Leon heard arguments from each side on why he should stay his requirement that the Federal Reserve replace the debit rule he overturned on July 31 and the U.S. Court of Appeals for the District of Columbia heard similar arguments urging it to set an expedited schedule to hear the case .
Now Judge Leon has issued the stay and the appeals court has set an expedited schedule.
After briefly reviewing his initial order for a new rule and his desire that the Federal Reserve develop one “in months, not years, Leon granted the stay.
“Since that day, the parties appeared before me twice and filed briefs regarding the duration of the stay and the possibility of an interim rulemaking,” Leon wrote. “Upon consideration of those pleadings, oral arguments and the entire record, I conclude the stay should remain in place while our Circuit Court reviews my decision.”
The Appeals Court set a schedule which calls for the Federal Reserve and interested parties which support its position file its brief (not to exceed 14000 words) by October 21, along with a joint brief from organizations that support its position (not to exceed 7000 words).
The merchants and groups that support their position have until November 20 to file their arguments, with the same word limits and then the Federal Reserve has until December 4 to answer their filings.
Both NAFCU and CUNA celebrated the decisions.
“NAFCU staunchly advocated for keeping the status quo to avoid confusion with a new interchange rule. Interchange is an enormous issue for credit unions, and an interim or expedited rule could have had catastrophic effects on credit unions’ ability to serve their 96 million members,” said NAFCU General Counsel Carrie Hunt.
“CUNA continues to believe that the Fed’s existing rules are far from perfect for credit unions, but in striking down the rule this summer, Judge Leon injected extreme uncertainty into the payment card system, which needs to continue efficiently serving merchants and consumers pending the outcome of this appeal,” said CUNA President/CEO Bill Cheney.
“CUNA is relieved that there is an order in place that will provide that certainty for now. For credit unions, keeping the existing rules in place pending the appeal limits potentially needless compliance obligations, given the Fed’s existing rules could ultimately be upheld,” Cheney added.