The Federal Reserve's proposed rule regulating interchange is unconstitutional and would do "irreparable harm to issuers and consumers.''

Those are among the key points that a coalition of credit union and bank groups –including CUNA and NAFCU– make in a friend of the court brief filed today on behalf of TCF National Bank's (TCF) lawsuit against the debit card interchange fee provisions of the Dodd-Frank Act.

The amicus brief contends that previous court cases have concluded that "government price controls that preclude the recovery of costs plus a reasonable return are unconstitutionally confiscatory.'' It further argues that the government's contention that the proposed rule doesn't harm the property interests of card issuers is "startling, and fortunately wrong under settled precedent of both the Supreme Court and the Eighth Circuit.''

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