What’s Next On Debit Card Interchange?

The next development in the battle surrounding the Federal Reserve’s debit interchange rule will take place on Wednesday in the U.S. District Court for the District of Columbia, and the Credit Union National Association will monitor the court action during the hearing that day.

The hearing follows District Court Judge Richard Leon’s decision that orders the Fed to go back to the drawing board on its rule that implements the so-called Durbin amendment of the Dodd-Frank Act that capped debit card interchange fees and set network non-exclusivity regulations. Leon said the Fed’s rule disregarded Congress’s intent when deciding how much financial institutions can charge merchants for debit card transactions and that the Fed’s cap is too high.

Leon vacated the Fed rule, but issued a temporary stay on his own order to keep the current rule temporarily in effect. The judge did not define how long the stay would be in effect, and that is a key issue expected to be a focus of the Wednesday convening.

Although there is no way to predict what Judge Leon might do Wednesday, or what the parties to the case might argue in front of him, there are a number of possibilities, including:

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