At long last, the U.S. Court of Appeals for the DC Circuit hasleft intact the Federal Reserve Board's rule implementing theDurbin amendment of the Dodd Frank Act.

In a ruling released Friday, a three-judge panel overturned alower court's 2013 decision that largely gutted the Fed's rule.

“The district court granted summary judgment to the merchants,concluding that the rules violate the statute's plain language,”the panel wrote in its 38-page decision. “We disagree. Applyingtraditional tools of statutory interpretation, we hold that theboard's rules generally rest on reasonable constructions of thestatute …” the panel wrote.

The court did send part of the regulation that addresses therole the costs of monitoring fraud should play in calculating thedebit interchange cap back to the Fed for further explanation;however, but the court acknowledged this was a minor part of therule.

The decision clears an atmosphere of uncertainty that has hungover credit union debit programs since Judge Richard Leon ruledon July 31, 2013, that the Fed would need to rewrite its debitrule.

Specifically, the possibility that credit unions would have toestablish relationships with more debit networks to comply with theDurbin amendment is now unlikely.

None of the retail trade association plaintiffs immediatelyprovided comment about the ruling. The retailers argued the Fedmisinterpreted the Durbin amendment when it crafted the rule,leaving the interchange cap too high and not opening up debittransaction routing enough.

Reactions to the decision from credit union trade associationswere predictably approving.

While credit unions were not litigants in the case, a coalitionof credit unions and other financial institutions filed briefs withthe court, largely in support of the Fed's position, they alsostressed that the debit cap was too low.

“This is truly a rebuke to the merchants and a victory forcredit unions,” said CUNA General Counsel Eric Richard. “While CUNAand our partner members of the coalition of financial institutionscontinue to maintain that the cap is too restrictive, this decisionconstitutes an almost total rejection of the merchants' arguments.We hope this decision will be a first step toward restoring somegrounding in reality to the debate over interchange fees, not onlyin the courts, but also in Congress and at the regulatoryagencies.”

NAFCU also expressed approval of the ruling while reservingapproval of the rule.

“NAFCU is pleased with the appeals court's decision as itmitigates the harm that would have been done by the district courtruling. We still believe that the Fed's rule is flawed,” saidCarrie Hunt, NAFCU's senior vice president of government affairsand general counsel. “NAFCU will continue to advocate for creditunions' interests and abilities to receive income on card servicesand recover costs incurred in transactions.”