WASHINGTON (11/13/13)--The next round in an ongoing interchange legal battle between the Federal Reserve and merchants has been set: Oral arguments for both sides are set for 9:30 a.m. (ET) on Jan. 17. The arguments will be heard by a three-judge panel in the U.S. Court of Appeals for the District of Columbia Circuit.
Circuit Judges David Tatel, Harry Edwards, and Stephen Williams will hear the appeal.
The oral arguments follow U.S. District Judge Richard Leon's July decision in favor of a merchant request to strike down the Fed's price caps on debit card interchange fees. He said that the Fed did not follow narrow congressional intent when it implemented the cap. The Fed has appealed that decision.
The Fed on Oct. 20 filed a brief in support of its rule implementing the debit card interchange cap required by the Dodd-Frank Act. The Credit Union National Association and financial services partners also filed an amicus brief on that date.
Merchant briefs in the case will be filed on Nov. 20.
The current Fed interchange fee cap rule limits debit interchange fees for issuers with assets of $10 billion or more to 21 cents, and allows an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards.
The interchange regulations will remain in effect as the court case moves forward.
Credit unions under $10 billion are exempt from the interchange fee cap rule, but not the network exclusivity provisions. CUNA maintains all credit unions, including those under $10 billion in assets, are negatively affected by these price controls in the marketplace.