Newsroom

The Federal Reserve and merchant groups asked a federal district court Wednesday to enter a final judgment that marks the end of litigation over the Fed's calculation of a "reasonable" debit interchange fee under the Durbin amendment of the Dodd-Frank Act.

The only issue still under review by the court was the Fed's inclusion of transactions-monitoring costs in the interchange fee standard rather than including it in the separate fraud-prevention adjustment standard. The Fed, responding to this issue last month, said transactions-monitoring was an "integral part of the [transaction] authorizing process."

The judge in this case is Richard Leon. Once he enters a final judgement stipulating the parties' agreement, the Fed's final debit interchange rule will remain in effect for all depository institutions with more than $10 billion.

Leon said the Fed's regulation was invalid in his initial ruling, but that was overturned on appeal. The Supreme Court declined merchants' request for review of the case.

NAFCU welcomed the outcome of this suit but maintains that even the current debit fee cap is too low to allow credit unions a reasonable return on debit card services. The association continues to advocate on behalf of member credit unions to provide a reasonable return for credit unions from interchange fee income.