NEW YORK--(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.