A Minnesota-based bank with $18 billion in assets is asking a federal court to overturn a central provision of the financial overhaul law.
TCF National Bank filed a lawsuit against the Federal Reserve on Tuesday challenging the constitutionality of the "interchange fee" provision, a measure sponsored by Senate Majority Whip Dick Durbin (D-Ill.) that aims to limit the fees merchants pay to debit card issuers.
The lawsuit is one of the first major legal challenges to the financial overhaul law enacted in July by President Obama.
"We have filed this lawsuit because we believe this law is unconstitutional," said William Cooper, chairman and chief executive officer of TCF Financial Corporation, the bank holding company for TCF National Bank.
The bank said in the lawsuit that the provision "irrationally, prejudicially and illegally" interferes with the company's business. The lawsuit, filed in U.S. District Court in South Dakota, seeks a preliminary injunction.
The financial law requires the Federal Reserve to issue rules requiring that the interchange rates are "reasonable" and "proportional" relative to the processing costs. Cooper said the provision "limits the amount of revenue that banks can collect." ...The Hill
Durbin says this isn't going anywhere. The limitations don't affect the banks, just the card networks and the retailers.
