Financial Industry Coalition Files Amicus Brief in Retailers’ Lawsuit Against Federal Reserve
March 15 2012 - 10:00AM
Business Wire
A broad coalition of trade associations representing thousands
of small and large financial institutions today filed an amicus
brief in the lawsuit brought by some of the nation’s largest
merchants who seek to increase the $6 billion-plus windfall that
they have already received from the Federal Reserve Board’s June
2011 Final Rule on interchange fees. The coalition’s brief
demonstrates that the Rule is fundamentally flawed because it
contravenes the Durbin Amendment by imposing caps on interchange
fees that fall far short of allowing debit card issuers to cover
their costs and a reasonable rate of return on their investments.
The brief further notes how small and large financial institutions
will be harmed while consumers will see none of the promised
benefits of the Rule.
“The merchants have claimed all along that imposing government
price controls on interchange fees would directly benefit
consumers, yet there is absolutely no evidence that they have
lowered their prices,” said coalition spokeswoman Trish Wexler. “So
while consumers have gotten nothing from the retailers, the
merchants are back asking the courts to add even more to the $6
billion windfall they are now enjoying.”
Smaller institutions remain concerned about the long-term impact
of the rules and the law itself. “Even the smallest credit unions
and community banks will ultimately be harmed along with larger
financial institutions,” said Credit Union National Association
President and CEO Bill Cheney. “That means customers of all sizes
of institutions will face the increases in fees and cuts in
benefits that will be needed to continue supporting the payment
systems infrastructure.”
The coalition filing the amicus brief includes: Credit Union
National Association; Independent Community Bankers of America;
National Association of Federal Credit Unions; Midsize Bank
Coalition of America; Consumer Bankers Association; National
Bankers Association; The Clearing House Association; American
Bankers Association; The Clearing House Payments Company; and The
Financial Services Roundtable.