Friday, July 01, 2011 12:03:00 PM
WASHINGTON - On Thursday, TCF National Bank moved to voluntarily dismiss its months-long legal challenge to the Federal Reserve's proposed debit interchange fee regulations.
TCF last October filed suit against the Fed in the U.S. District Court for the District of South Dakota, alleging that it is unconstitutional for the government to require a business to charge below-cost rates that negatively impact businesses.
The district court in April denied TCF's motion for a preliminary injunction, indicating the issue was not ripe for decision because the Fed had not yet issued its final regulations on debit interchange. It also denied the Fed's motion to dismiss the case. The bank later appealed to the Eighth Circuit Court of Appeals but that court on Wednesday refused TCF's request for a preliminary injunction to halt the debit interchange fee regulations.
The bank asked the district court to dismiss its case at a hearing held early on June 30 in Sioux Falls, S.D. The bank asked for a voluntary dismissal without prejudice, so it would retain the option to re-file the case at a later date.
CUNA and other financial institution trade associations filed a joint amicus brief supporting two of TCF's three arguments.
The final interchange rule, which was unveiled by the Fed on Wednesday, caps large issuer debit interchange fees at 21 cents.