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TCF wants court to demand Fed interchange rule now
WASHINGTON (6/24/11)--Disagreeing with the Federal Reserve Board, TCF Bank told a federal court this week that the particulars of a final rule to set a debit card interchange fee cap do matter in the bank’s case to stop the cap, and the bank asked a federal judge to make the Fed hand over the rule even before it is issued for public comment on June 29. TCF Bank, of Minnesota, has sued to stop the Fed from implementing the fee cap that was ordered by the Dodd-Frank Wall Street Reform Act. The bank has argued, in part, that it is unconstitutional for the government to require a business to charge below-cost rates that negatively impact business. The interchange statute excludes certain costs, which makes it an unusual and therefore unconstitutional regulation, TCF maintains. Oral arguments in the case, known as TCF National Bank v. Bernanke ( No. 11-1805), were heard June 16. Since that time the Fed notified the U.S. Court of Appeals for the Eighth Circuit that it would release its final rule on June 29. However, that release, the Fed said, “should not affect the court’s disposition” of this case. TCF then shot off its own letter to the court. The bank agreed the court could rule on its pending appeal in the absence of a final rule. However, TCF attorney Timothy Kelly wrote, the Fed’s rule is very much an issue. He disputed the Fed’s claim that TCF's challenge to the statute "does not implicate the regulation." “For example, the final regulation is relevant to TCF's contention that the language of the Durbin Amendment does not permit the Board of Governors to issue an interchange rate that is non-confiscatory,” Kelly said. TCF did not ask to view an advance copy of the Fed rule, only that the court be supplied with it in confidentiality. The Credit Union National Association, the Clearing House Association LLC, American Bankers Association, Consumer Bankers Association, The Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, and the National Association of Federal Credit Unions have earlier filed an amicus brief in support of some aspects of TCF's arguments against the interchange statute.


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