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Wednesday, July 31, 2013

Judge Overturns Fed’s Debit-Card Interchange Rule

U.S. District Judge Richard Leon overturned the Federal Reserve’s rule limiting how much banks can charge merchants for debit-card transactions, a provision of the Dodd-Frank Act commonly referred to as the Durbin Amendment.

In the ruling, Judge Leon stated:
The Board has clearly disregarded Congress's statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction.

It appears that the Board completely misunderstood the Durbin Amendment's statutory directive and interpreted the law in ways that were clearly foreclosed by Congress.
Judge Leon noted that the Fed’s 21-cent debit fee cap would remain in place until the Fed can replace the invalid portions of the rule, which has been in place since Oct. 1, 2011.

Read the ruling.

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