TCF National Bank fights cap on interchange fees

TCF National Bank is fighting in a U.S. appeals court to reverse a trial judge’s decision denying the bank’s bid to block the cap on interchange fees while the bank challenges its legality.

TCF, a Sioux Falls, South Dakota-based unit of TCF Financial Corp., sued the Board of Governors of the Federal Reserve System last year, arguing that a regulation limiting the fees a bank can charge retailers for debit card transactions is unconstitutional because it violates protections against property being confiscated without compensation and equal protection under the law, Bloomberg reports.

“This is a discriminatory statute,” Timothy D. Kelly, a lawyer for TCF, said, according to Bloomberg.

Lindsey Powell, an attorney for the Department of Justice, defended the regulation, known as the Durbin Amendment.

Powell said TCF has “no statutory or contractual right to the continued receipt of any minimum level of interchange fees,” Bloomberg reports.

The trial court judge refused to delay enforcement of the law because the regulation had not yet been enforced.

According to Bloomberg, TCF is the 47th-biggest U.S. bank and the 11th- biggest issuer of Visa debit cards.

TCF Financial Chairman William Cooper told Bloomberg that the cap, if upheld, would force his bank and others to consider making up the revenue elsewhere, likely through middle-class consumers.

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