Interchange rule stay will keep order
Credit Union National Association (CUNA) President/CEO Bill Cheney said a September 20 court decision to allow existing debit interchange fee cap rules to stay in place during an appeals means there will be an order in place that will provide certainty, at least for now.
The existing Federal Reserve (Fed) rules implementing the debit interchange fee cap and network exclusivity provisions required by the Durbin Amendment will stay in place throughout an appeals process as the Fed seeks to overturn a July court ruling that declared those rules illegal.
So said Judge Richard Leon of the U.S. District Court for the District of Columbia who is also the judge that ruled the Fed did an inadequate job of implementing the Dodd-Frank interchange rule in 2011. Leon criticized the Fed for going beyond congressional intent when writing the rule by including too many items considered to be costs for card issuers.
Cheney said, "For credit unions, keeping the existing rules in place pending the appeal limits potentially needless compliance obligations, given the Fed's existing rules, could ultimately be upheld.
"While many believe that lowering these caps will help consumers, there is simply no evidence that's true. Studies have shown merchants aren't passing on the money they are saving under the Fed's rule to consumers. The Fed's rule is a multi-billion dollar windfall for merchants, plain and simple.