Even if U.S. District Court Judge Richard Leon orders debit card issuers to pay merchants for past interchange payments, legal experts doubt that his order would include most credit unions.
Leon raised the possibility of making such an order at Wednesday’s hearing where he kept the old debit card rule in place for another week.
While few legal experts wanted to speculate on the record, they generally doubted whether a federal judge has the authority to order such payments and pointed out that most credit unions belong to the class of debit issuers that were not covered by the cap.
“I emphasize that I haven’t done any research about this yet, but I don’t know of a case where a federal judge is able to order one private party pay another private party for mistakes that a regulator has made,” remarked CUNA General Counsel Eric Richard.
Richard also agreed with other legal experts’ observations that even if the judge had the power to order such payments, credit unions and other smaller asset debit issuers would not have to pay them since they were not under the cap.
The CUNA attorney also said that it was most likely CUNA would not address the damages question in its own brief to Leon, but would instead sign on to a brief prepared for a coalition of debit issuers represented by Seth Waxman, a partner in the Washington D.C., law firm of WilmerHale, adding that CUNA supported the joint effort as long as it felt credit union’s view and interests were being adequately represented.