WASHINGTON (7/31/12)--Oral arguments in the lawsuit by merchants against the Federal Reserve Board of Governors over its Dodd-Frank Act-mandated debit interchange rule are set to be heard Tuesday, Oct. 2, and will include arguments from counsel who filed amicus briefs on behalf of a coalition of credit union and bank trade associations, according to court documents filed in the U.S. District Court for the District of Columbia.
Oral arguments will begin at 11 a.m. ET in the U.S. District Court for the District of Columbia. Seth P. Waxman, an attorney with Wilmer Cutler Pickering Hale and Door, a Washington, D.C., law firm, will argue on behalf of The Clearing House Association and a coalition of associations, including the Credit Union National Association (CUNA). Waxman was the Acting Solicitor General who argued the AT&T FCU field-of-membership case before the U.S. Supreme Court in 1997.
The National Association of Convenience Stores and other retail organizations filed their suit in March, seeking a summary judgment declaring the interchange rule and network non-exclusivity regulation invalid. They allege that the 21-cent cap for issuers with assets of $10 billion or more is too high and that the Fed exceeded its authority on the rule. The rule became effective in October 2011.
The financial institutions' coalition, in their brief--which was filed to reflect financial institutions' perspective on the case, maintain the cap is too low and does not allow debit card issuers to cover their costs and earn a reasonable rate of return on their investments.
The Fed, in its response to the suit, made a number of points defending its interpretations of the interchange amendment to the Dodd-Frank Wall Street Reform Act. (See "Fed response filed in interchange suit" for the full arguments.)
In addition to CUNA and The Clearing House Association, the coalition includes the Independent Community Bankers of America, National Association of Federal Credit Unions, Midsize Bank Coalition of America, Consumer Bankers Association, National Bankers Association, American Bankers Association, The Clearing House Payments Co., and The Financial Services Roundtable.
The case will be heard before U.S. District Judge Richard J. Leon in Courtroom 18. CUNA attorneys will be attending the hearing.