April 5, 2011
In the first substantive action on TCF’s lawsuit challenging the constitutionality of the Durbin Amendment, a federal district court on Monday heard arguments on the Government’s motion to dismiss the lawsuit. The only definitive ruling was a denial of the plaintiff’s motion for a preliminary injunction. This means that the Federal Reserve will continue the process of developing the regulations scheduled to implement the Durbin Amendment when it becomes effective in July.
On the other hand, the court did not grant the government’s motion to dismiss. Rather, it indicated that it would take the motion “under advisement” and that it would consider the propriety of the regulations when the Federal Reserve promulgates them. The message for the affected industry is continuing uncertainty. Although the likelihood that the statute or regulations will be entirely invalidated seems remote, the case will proceed, and the possibility remains that when the Federal Reserve issues final regulations the court will conclude that all or a portion of the Durbin regime is unacceptable.
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Ronald Mann is a nationally recognized scholar and teacher in the fields of commercial law and electronic commerce. He received his J.D. from the University of Texas School of Law, where he graduated first in his class and was the managing editor of the Texas Law Review. He worked for the Justice Department as an Assistant for the Solicitor General of the United States. After a semester as a visiting professor in 2007, Mann accepted a position on the Faculty of Columbia Law School.
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