The Bank Policy Institute (BPI) and The Clearing House Association have filed a motion to intervene in the case of Corner Post, Inc. v. Board of Governors of the Federal Reserve System. This legal challenge involves the 2011 rules on debit interchange revenue established under the "Durbin Amendment" in the Dodd-Frank Act. Corner Post, a truck stop in North Dakota, is contesting these rules with support from retail merchant trade associations, claiming they contradict the Durbin Amendment.
Greg Baer, President and CEO of BPI, stated that while banks oppose the Durbin Amendment's price-fixing policy, they support defending the legality of the Federal Reserve's 2011 regulation. He noted that similar challenges by retail groups were previously unsuccessful in court.
David Watson, President and CEO of The Clearing House, remarked on merchants' ongoing efforts to lower interchange caps despite benefits from the 2011 rule. He emphasized their commitment to ensuring merchants contribute fairly to debit card network services.
This case is part of broader efforts by retail trade associations to reduce debit interchange rates. These groups petitioned for lower rates in December 2022, leading to proposed amendments by the Federal Reserve in October 2023. They also influenced legislation like Illinois' Interchange Fee Prohibition Act, currently facing legal challenges.
An amicus brief from the Office of the Comptroller of the Currency highlighted interchange fees' role in fraud protection and transaction processing costs. Studies indicate merchants gain from debit card services through increased sales and improved customer experiences.
Regulation II mandates that debit card interchange revenue be "reasonable and proportional" to issuer costs. Corner Post's challenge was initially dismissed as untimely but revived following a Supreme Court decision clarifying statute limitations based on harm occurrence rather than rule issuance.
The case is being considered by the United States District Court for North Dakota under case number 1:21-cv-95-DMT-CRH.
BPI represents various banks operating in the U.S., focusing on public policy research and advocacy related to financial services issues. The Clearing House Association provides advocacy on payment-related matters and operates key payment infrastructure across the country.