TCF Financial Corp. has announced that it is dropping its lawsuit against the Federal Reserve Board over debit card swipe fees after being denied in a U.S. appeals court.
"While we continue to believe that the Durbin Amendment is unconstitutional because it requires below-cost pricing and exempts 99 percent of all U.S. banks, we believe our lawsuit has served its purpose in demonstrating the unfairness of the Durbin Amendment and that it is time to move on," TCF CEO William Cooper said, StarTribune.com reports.
On Wednesday, a U.S. Appeals court denied TCF’s request for an injunction to prevent the regulations from taking effect, saying that the bank is well within its rights to recoup swipe fee losses by assessing fees on its customers and the regulation could not be construed as a price control, according to NerdWallet.com.
Hours after the court decision, the Fed announced that it would cap the fees big banks can charge retailers for each swipe of a debit card at 21 to 24 cents.
The new cap is substantially higher than the 12 cent cap that the Fed had originally proposed in December.
"The Federal Reserve Board's final rule is an improvement from its initial proposal and recognizes many of the points we made in our case,” Cooper said, according to Star Tribune.