ABA and several trade groups yesterday filed a friend of the court brief in the case over the Federal Reserve’s interchange rule, noting that they oppose the Fed’s rule capping interchange fees but are even more strongly against Judge Richard Leon’s ruling that the fee cap should be lower still.
The groups argued that Leon misinterpreted how much of the card issuer’s cost can be recovered under the statute, that he ignored the statute’s “reasonable and proportional” fee allowance and that he went beyond the law’s requirements on exclusivity.
“The district court’s constructions would gravely harm all participants in the electronic debit-card system through reduced services, diminished investment in innovation, increased fees to consumers, and disruptive technological changes -- all with no tangible offsetting economic benefit,” they argued.
Read the brief.
In related news the Federal Reserve also filed a brief in its appeal of the federal judge’s decision.
The Federal Reserve argued that Dodd-Frank “could reasonably be interpreted” to permit the agency to consider the incremental costs of processing debit card transactions, such as losses from fraud and transaction monitoring, when determining the fees banks should be allowed to collect from merchants.
Read the Federal Reserve’s brief.