WASHINGTON (5/14/12)--A coalition of merchants who sued the Federal Reserve Board over the Fed's debit fee interchange rule mandated by the Dodd-Frank Act has filed its response to the Fed's motion to dismiss the case in a federal court in Washington, D.C.
The coalition filed its brief Friday in the U.S. District Court for the District of Columbia, one day after the key sponsor and author of the Dodd-Frank Act's interchange amendment, U.S. Sen. Richard Durbin (D-Ill.), filed an amicus brief supporting the retailers in the case. (See related story in Friday's News Now by using the resource link below).
The Credit Union National Association (CUNA) will review the case's latest developments in a meeting this afternoon with the national Clearing House Association and a coalition of trade associations representing thousands of small and large financial institutions. CUNA and the coalition in March filed their own amicus brief in the case, providing financial institutions' perspective regarding the Fed's rule. Their joint brief underscored that consumers have not seen any pricing benefits for products and services merchants promised when they fought for a government-set cap on what card issuers may charge for their services (News Now March 16).
The retailers' suit alleges the Fed interchange cap is too high and that the Fed exceeded its authority on the rule. CUNA's and the coalition's briefs argue the cap is too low and that it does not allow debit card issuers to cover their costs and earn a reasonable rate of return on their investments.