The Federal Reserve Board of Governors is seeking to dismiss the TCF Financial Corp. lawsuit that questions the constitutionality of the Durbin Amendment and aims to halt the new caps on debit card interchange fees.
TCF, which is a mid-sized bank, about $18 billion of assets headquartered in Minnesota, sued the Fed – the Federal Reserve Board claims that the Durbin legislation amounts to an unconstitutional seizure of property. (Related Article: Will TCF’s Bill Cooper Topple Durbin?)
In the documents filed in South Dakota federal court this week to have the suit dismissed, the Fed governors claimed plantiff TCF has “altogether failed to identify any statute, regulation, or contract guaranteeing it the level of debit interchange fees it currently receives. This lack of a property interest is not surprising given that Plaintiff’s interest in these fees is completely dependent upon the discretion of Visa and other factors beyond Plaintiff’s control.”
The Fed went on to allege that TCF’s loss of interchange income is not impending but speculative and that an injunction would only hurt merchants and consumers.
“Injunctive relief would further damage the public’s interest in relying on Congress’s collective judgment and the Board’s expertise to balance the competing demands inherent in financial regulation,” added the Fed.
Click here to read the Fed’s full request to have TCF’s lawsuit dismissed.
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