WASHINGTON (8/21/13)--The next developments in an ongoing court challenge to the Federal Reserve's debit interchange fee cap will take place today when Fed attorneys, merchant representatives and Judge Richard Leon meet in the U.S. District Court for the District of Columbia. Credit Union National Association staff will monitor the hearing.
Leon in a scheduling hearing last week requested that Fed officials discuss the feasibility of releasing an interim final interchange regulation, and develop a timeline for implementation of such a rule. The judge urged the Fed to move expeditiously, and expects them to have discussed these issues by today. He also last week asked whether the court should order issuers to "disgorge revenue" obtained due to the Fed regulation. (See Aug. 14 News Now story: Judge Fierce On Fed Interchange Rule.)
Last week's hearing followed Leon's July 31 decision to strike down the Fed's price caps on debit interchange fees. He ruled at that time that the Fed did not follow narrow congressional intent when it implemented the cap and other changes imposed by what is known as the Durbin amendment. He also said in that ruling that the Fed would have some time to redraft its rules--but did not specify how much time.
The Fed today could appeal this ruling, or ask the judge for more time to consider an appeal or other actions.
For now, briefs on a potential Fed interim interchange rule must be submitted by Aug. 28, and briefs on the issue of potential damages must be submitted by Sept. 16. However, these deadlines could be changed today.
CUNA is doing all it can to protect credit union interests in this case, and CUNA is already devising legal strategies should the judge move forward on his theory of "damages."
Watch News Now this afternoon for live, updated coverage of today's hearing.