Regulation

Court to hear arguments in Dodd-Frank interchange fee case

126px-US-FederalReserveSystem-Seal.svg_3A three-judge panel in a U.S. appeals court will hear oral arguments on Jan. 17 for both sides of the legal battle between the Federal Reserve and merchants over Dodd-Frank mandated debit interchange rules.

Judges David Tatel, Harry Edwards and Stephen Williams of the U.S. Court of Appeals for the District of Columbia Circuit will hear the appeal.

The arguments come after a district court decision in July that sided with merchants in their request to strike down the cap on debit card interchange fees, saying the Fed did not follow congressional intent when it implemented the fee ceiling.

Last month, the Fed filed a brief in support of its rule implementing the interchange cap, which limits debit interchange fees for issuers with $10 billion or more in assets to 21 cents and allows an additional five points per transaction to be charged to cover fraud losses. Merchant briefs will be filed on Nov. 20.

Credit unions with less than $10 billion in assets are exempt from the cap but not from network exclusivity rules. The Credit Union National Association has said the cap negatively impacts all credit unions.

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