CUNA President/CEO Bill Cheney applauded the Federal Reserve’s decision Wednesday to appeal a recent district court decision that invalidated the agency’s debit interchange fee rule, News Now reports.
“Although the Fed’s rule is far from perfect for credit unions, the district court's decision compounds Durbin’s already negative consequences and is the wrong result for consumers,” Cheney says. “We appreciate that the Fed is prepared to take this issue to the next level, and CUNA will do everything it can to ensure the D.C. Circuit Court of Appeals is aware of credit union concerns as the case moves forward.”
The Fed will file a motion to expedite this appeal, which could bring the case to its conclusion within a year.
CUNA’s regulatory staff outlined several key points for credit unions:
1. The Fed will request a stay of Judge Richard Leon's July 31 interchange decision. Both the Fed and merchant representatives said they support a longer stay of Leon’s order pending a resolution of the Fed's appeal.
“The Fed raised the possibility of the merchants having to live for a while in a world with no rule at all,” says CUNA General Counsel Eric Richard. “The possibility of returning to a pre-Durbin world, even temporarily, might allow financial institutions to charge whatever they want for interchange fees.
2. CUNA agrees with the Fed’s position that an interim rule is unnecessary because it would force all involved parties to adopt a new rule on a short-term basis when the original rule could ultimately be upheld by the D.C. Circuit Court.
CUNA always wants to limit unnecessary compliance obligations on credit unions, and will strongly advocate for this position before the court.
3. Counsel for a group of financial institutions, including CUNA, told the judge Wednesday that the group is considering instituting new litigation on constitutional grounds should the Fed put in place an interim rule that does not allow financial institutions to recoup their investment.
Additional hearings in the case remain on the schedule: Briefs on a potential Fed interim interchange rule must be submitted by Aug. 28.
CUNA continues to closely follow the progress of this debit interchange case, and is exploring a variety of options to ensure credit unions’ interests are protected going forward.