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What could come next in interchange case: CUNA
WASHINGTON (1/22/14)--As Credit Union National Association General Counsel Eric Richard noted last week, the discussion by a trio of judges Friday in the ongoing debit interchange fee cap case presented many positives for credit unions. However, Richard reminds credit unions there are a range of possibilities for how the court could proceed.

The U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments from CUNA, the Federal Reserve and a merchants coalition in the case known as NACS, et al. v. Board of Governors of the Federal Reserve System.

Comments by the judges at that time raised real questions about whether they will fall in line with a lower court ruling that sought to overturn the Federal Reserve's debit interchange fee cap regulations. However, their possible action options include:
  • Reversing the case and sending it back to U.S. District Court Judge Richard Leon for further consideration;
  • Forcing the Federal Reserve to revisit the interchange cap rule; or
  • Affirming Leon's July decision that struck down the rule.
Judges David Tatel, Harry Edwards and Stephen Williams last week seemed to indicate they would take a close look at Leon's decision to strike down the Fed's interchange rules. (That ruling was stayed pending appeal.)

This closer look could potentially result in more costs being taken into account in the setting of interchange fees than Judge Leon's decision would allow, Richard said.

The case was brought by a merchants coalition in 2012, seeking to overturn the Fed's debit interchange fee cap regulations. The judges last week heard oral arguments from the Fed, a coalition of financial services groups, including CUNA, and merchants. (See Tuesday NewsNow story: Appeals court to closely examine lower court interchange ruling.)

The appeals court will rule on the case before its term ends in August, and a decision could come as soon as this spring.


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