TCF National Bank has asked the Eighth U.S. Circuit Court of Appeals in St. Louis for a rapid decision on the Minnesota-based bank's legal challenge to the Federal Reserve implementation of the Durbin Amendment.
The $19 billion bank challenged the constitutionality of the Durbin Amendment, named for sponsor Sen. Richard Durbin (D-Ill.), on the grounds that it violates Fifth Amendment protections against property being confiscated without compensation and due process, but a lower court declined to issue a preliminary injunction.
In this appeal, TCF, which says it's the 11th-largest U.S. issuer of Visa-branded debit cards, said that the mandated interchange debit cap will cost it $200,000 per day and that debit card issuers as a whole stand to lose over $1 billion per month.
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"The requested expedition is necessary because if this Court does not rule on the merits of this appeal at least several weeks before the Durbin Amendment goes into effect on July 21, 2011, TCF will suffer irreparable and unrecoverable revenue losses, even if the Durbin Amendment is later declared unconstitutional," TCF argued in its brief.
"Other banks that issue debit cards and must honor the rate cuts will also suffer huge, unrecoverable revenue losses. The entire debit card system, upon which Americans have come to rely as the primary payment alternative to cash, will be jeopardized by the drastic, Draconian rate cuts imposed on regulated banks by the Durbin Amendment" the bank added.
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