WASHINGTON (6/8/15)--The U.S. District Court for the District of Columbia will conduct a status conference today on a case involving the Federal Reserve’s rules regarding debit card interchange fees.
CUNA will be monitoring the meeting, which is the latest legal hearing involving the Fed's interchange regulations.
The National Association of Convenience Stores (NACS) et al v. Board of Governors of the Federal Reserve seeks to resolve whether the Federal Reserve’s regulation allowing a maximum debit card interchange fee is unlawful.
The U.S. Supreme Court rejected NACS’s petition to hear the case in January, a decision that CUNA President/CEO Jim Nussle called “the correct decision for credit unions and consumers.”
An interchange fee occurs when a debit card transaction takes place, with the fee going to the financial institution that issued the card. Generally it is used to pay for the cost of providing the card and other transactions services.
The Dodd-Frank Act called for a cap on the fees and required the Fed to implement the cap, which it did in 2011 by announcing a cap of 21 cents per transaction for issuers with more than $10 billion in assets.
CUNA, as part of a coalition of financial services organizations, has said the cap was too low. While merchants have argued that a lower cap would benefit consumers, there has been no evidence that it would cause prices to come down.
After the initial lawsuit brought by NACS, a U.S. District Court struck down the cap in July 2013. That decision was overturned in March 2014 by a three-judge panel of the U.S. District Court of Appeals.