TCF Financial is suing to stop the Durbin Express.
In a lawsuit filed yesterday in federal district court in South Dakota, TCF claims the so-called Durbin Amendment is unconstitutional because, among other things, it amounts to the unreasonable confiscation of property, and asked the court to tell the Federal Reserve Board to stop in its tracks until the court can decide the merits of TCF’s claims.
Aside from its sweeping attack on the constitutionality of Durbin, the complaint is worth reading because it reports TCF’s estimates of the incremental costs it would be allowed to recover under the “reasonable and proportional to incremental cost” standard. TCF claims it would only be able to recover somewhere between 5 and 20 percent of current interchange fee levels—that is, it would take a 80-95% haircut.
Follow PYMNTS.com for its coverage of what is likely to be the first of many lawsuits that will fly over the next few years among the many stakeholders in the debit cards.
What do you think of TCF’s lawsuit? Share your thoughts below!
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