As previously promised, both sides in the ongoing fight over the Federal Reserve's rule on debit interchange have filed a joint request with the appeals court for a speedy appeals decision.
U.S. District Court Judge Richard Leon gutted the existing interchange rule in a July 31 decision that overturned both the debit interchange cap for large asset debit issuers and a provision meant to guarantee network competition.
The Federal Reserve announced in an Aug. 21 court hearing it will defend its current debit interchange rule before an appeals court. And in a twist, the Fed also said it will join forces with its opponents to seek a speedy appeal decision.
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The two sides filed their request yesterday.
The merchants expressed their positions by outlining what they said were their ongoing damages from the old rule.
"Merchants assert that every day that passes under the Final Rule potentially causes them significant and irreparable injury," the merchants wrote in their brief. "Merchants assert that the interchange fee standard adopted by the Board includes costs that are unallowable under the statute, and that the allowable maximum interchange fee should therefore be lower than the 21 cents plus ad valorem element allowed under the Board's rule. Even if they prevail on appeal, the Merchants may never recover billions of dollars in interchange fees already paid."
The Federal Reserve argued that the overall payments industry needed a fast decision.
"Thus, expedition of the Board's appeal would avoid the adverse effects on participants in debit card payment systems that would result from the elimination of the fee caps and enhanced routing requirements in the Board's regulation, or at least shorten the period during which those harms would continue," the Fed contended. "Moreover, assuming a stay pending appeal were to be entered to address these concerns, expedition of the Board's appeal would minimize the potential for any harms to third parties, such as the Merchants, if the district court decision is affirmed on appeal."
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