Debit Cards

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In a 37 page order, Chief Judge Virginia M. Kendall in the Northern District of Illinois determined that the Illinois Bankers Association, American Bankers Association, America’s Credit Unions, and Illinois Credit Union League have standing to bring their claims challenging the Illinois Interchange Fee Prohibition Act (the “IFPA”) and sovereign immunity does not apply to the federal claims.… Continue Reading

On October 16, 2024, the Bank Policy Institute and the Clearing House Association filed a motion to intervene in Corner Post, Inc. v Board of Governors of the Federal Reserve System. On July 1, 2024, the Supreme Court sided with Corner Post in holding that a Section 702 claim under the Administrative Procedure Act (APA) to challenge a final agency action first accrues when the plaintiff is injured by final agency action and has the right to assert it in court.… Continue Reading

On August 15, 2024, the Illinois Bankers Association, American Bankers Association, America’s Credit Unions, and Illinois Credit Union League filed a complaint for declaratory and injunctive relief against the Illinois Attorney General challenging the enactment of the Interchange Fee Prohibition Act (the “IFPA”). The 74 page complaint seeks a declaratory judgment that the IFPA is preempted by federal laws, unconstitutional, and invalid as applied to any participant in the payment system, and to permanently enjoin the state from taking any investigatory or enforcement actions under the IFPA.… Continue Reading

The American Bankers Association (ABA) along with 50 state bankers associations, the DC Bankers Association and Puerto Rico Bankers Association sent a letter (the “ABA Letter”) to the Federal Reserve “in strong opposition to the Federal Reserve’s misguided proposal to reduce the regulated interchange cap under Regulation II, and to ask that the proposal be withdrawn pending a rigorous study of this proposal’s impacts and the cumulative impacts of the tsunami of newly finalized and pending regulations from the banking agencies.”… Continue Reading

On April 9, 2024, the Senate Judiciary Committee will hold a hearing on credit card competition. Senator Dick Durbin (D-IL) requested testimony at the hearing from the following Chief Executive Officers who have publicly opposed his Credit Card Competition Act: Ryan McInerney (Visa), Michael Miebach (Mastercard), Scott Kirby (United Airlines), and Robert Isom (American Airlines).… Continue Reading

In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction. The due date for comments on this proposal, originally February 12, 2024, has been extended to May 12, 2024. The Consumer Bankers Association (CBA) recently commissioned research on debit card interchange fee limits and the potential implications if the proposal to reduce debit interchange caps is finalized.… Continue Reading

Our special guest is Zarik Khan, Founder of Finsolute Advisors.  In October 2023, the Federal Reserve Board issued a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction.  We first look at the roles of the various parties involved in a typical transaction in which a consumer uses a debit card to make a purchase from a merchant and the various fees imposed in connection with the transaction. … Continue Reading

The Board of Governors of the Federal Reserve (the “Board”) has announced that it is extending the comment period for its proposed changes to its debit card interchange fee rule until May 12, 2024. Comments were originally due on February 12, 2024.

On October 25, 2023, the Board issued a Notice of Proposed Rulemaking for Regulation II.… Continue Reading

On December 13, 2023, the Congressional Research Service issued a report titled How the Credit Card Competition Act of 2023 Could Affect Consumers, Merchants, and Banks highlighting potential issues for Congress. 

As we previously blogged, Senator Dick Durbin and Representative Lance Gooden introduced “The Credit Card Competition Act of 2023” (a/k/a Durbin 2.0) to regulate interchange fees on credit cards by requiring certain credit card issuers with over $100 billion in assets to enable at least two credit card networks on their credit cards, and at least one of those networks must be a network other than Visa and Mastercard.… Continue Reading

As we previously blogged, the Board of Governors of the Federal Reserve (the “Board”) held an open meeting on October 25, 2023 to discuss the debit card interchange fee cap. The debit card interchange fee cap was part of the so-called “Durbin Amendment” to the Dodd-Frank Act, which required the Board to promulgate a regulation applicable to banks having more than $10 billion in assets establishing maximum debit card interchange fees that are “reasonable and proportional to the actual cost” of processing the transaction.… Continue Reading