TCF Bank Seeks Order Blocking Fee Caps to Process Debit Card Transactions
TCF National Bank has asked a U.S. appeals court for an order that would block federal regulations capping the amount of money the biggest U.S. banks can charge retailers for processing debit-card transactions.
The bank, a TCF Financial Corp. (TCB) unit that sued Federal Reserve Chairman Ben S. Bernanke, is challenging U.S. District Judge Lawrence L. Piersol’s April 4 decision denying its request to halt implementation of the rule.
The lender challenges legislation appended to last year’s Dodd-Frank financial regulation overhaul bill. The provision, sponsored by U.S. Senator Richard Durbin, an Illinois Democrat, and known as the Durbin Amendment, bars banks with more than $10 billion in assets from collecting from retailers more money for debit-card transactions than the actual cost of providing that service.
“We are talking about the establishment of a confiscatory rate regime fully 15 years after banks began their debit businesses,” TCF’s attorneys argued in their brief filed today with the St. Louis-based U.S. Court of Appeals.
Matt Miller, a Justice Department spokesman, didn’t immediately return a call seeking comment.
TCF has argued that the proposed fee cap, which isn’t yet in force, is unconstitutional.
TCF Financial is based in Wayzata, Minnesota.
The lower case is TCF National Bank v. Bernanke, 10-cv- 04149, U.S. District Court, District of South Dakota (Sioux Falls). The appellate case is TCF National Bank v. Bernanke, 11- 1805, U.S. Court of Appeals for the Eighth Circuit (St. Louis).
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