TCF Pulls Its Legal Challenge of Durbin Amendment
WAYZATA, Minn. -- One day after the Eighth Circuit Court of Appeals affirmed a U.S. District Court ruling to deny TCF National Bank's motion for a preliminary injunction against the implementation of the Durbin Amendment, the bank moved to end its legal challenge.
Coupled with the Federal Reserve's final vote to cap debit card fees at 21 cents per transaction, TCF decided to ask the U.S. District Court in South Dakota to dismiss its case without prejudice.
"While we continue to believe that the Durbin Amendment is unconstitutional because it requires below-cost pricing and exempts 99 percent of all U.S. banks, we believe our lawsuit has served its purpose in demonstrating the unfairness of the Durbin Amendment and that it is time for us to move on," said William A. Cooper, chairman and CEO of TCF. "The Federal Reserve Board's final rule is an improvement from its initial proposal and recognizes many of the points we made in our case."
TCF, a Minnesota bank and one of the largest debit-card issuers, launched its legal battle against the Federal Reserve in October, as CSNews Online previously reported. The bank was contesting the constitutionality of the Durbin Amendment because the rules only apply to financial institutions with more than $10 billion in assets.
TCF argued the exemption gives an advantage to smaller banks. If the Fed had approved the originally proposed 12-cent cap, TCF was poised to lose $80 million in the first year. It is unclear what it stands to lose now with the 21-cent cap.
According to its website, TCF has 442 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota. It is the 11th largest U.S. Visa Classic debit-card issuer, ranked by sales volume.