Bank sues Federal Reserve to stop part of Wall Street overhaul
By Silla Brush - 10/12/10 12:33 PM ET
A Minnesota-based bank with $18 billion in assets is asking a federal court to overturn a central provision of the financial overhaul law.
TCF National Bank filed a lawsuit against the Federal Reserve on Tuesday challenging the constitutionality of the "interchange fee" provision, a measure sponsored by Senate Majority Whip Dick Durbin (D-Ill.) that aims to limit the fees merchants pay to debit card issuers.
The lawsuit is one of the first major legal challenges to the financial overhaul law enacted in July by President Obama.
"We have filed this lawsuit because we believe this law is unconstitutional," said William Cooper, chairman and chief executive officer of TCF Financial Corporation, the bank holding company for TCF National Bank.
The bank said in the lawsuit that the provision "irrationally, prejudicially and illegally" interferes with the company's business. The lawsuit, filed in U.S. District Court in South Dakota, seeks a preliminary injunction.
The law requires the Federal Reserve to issue rules requiring that the interchange rates are "reasonable" and "proportional" relative to the processing costs. Cooper said the provision "limits the amount of revenue that banks can collect."
Durbin said he is confident his provision will stand up in court.
"The law in no way addresses the fees TCF, or any other bank, can charge and it does not set interchange rates," Durbin said in a statement. "Our language simply ensures that debit interchange fees charged to retailers by the card networks — not the banks — are 'reasonable and proportional' to the cost of processing transactions and provides competition in an area of the market where there’s none."more...
http://thehill.com/blogs/on-the-money/banking-financial-institutions/123823-wall-street-law-challenged-in-court
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
