The debate over the debit interchange fee cap under the controversial Durbin Amendment went before a U.S. District Court judge recently.
Retailers filed suit against the Federal Reserve in order to force the regulator to lower the interchange cap even further, saying that the cap doesn’t go far enough and that the Durbin Amendment mandates a lower rate, Credit Union Times reports.
Debit issuers, however, maintain that the debit regulations have already gone too far, as they prevent issuers from covering their debit card program costs and a seeing a reasonable return on investments.
The Credit Union National Association and National Association of Federal Credit Unions, part of the issuer coalition, filed an amicus brief on behalf of issuers earlier this year.
“The merchants have claimed all along that imposing government price controls on interchange fees would directly benefit consumers, yet there is absolutely no evidence that consumers are benefiting,” Trish Wexler, a coalition spokeswoman, said, according to Credit Union Times. “So while consumers have gotten nothing from the retailers, the merchants are back asking the courts to add even more to the $6 billion windfall they are now enjoying.”
Fred Becker, the president and CEO of NAFCU, spoke out against government price controls under the Durbin Amendment.
“Credit unions are already feeling the pinch of the Durbin Amendment’s rate cap, despite the exemption for institutions with less than $10 billion in assets,” Becker said, Credit Union Times reports. “The government should not set market prices.”
Judge Richard Leon did not indicate when he may rule on the issue, but he did say that he hoped he would be able to announce a decision soon.