MN Bank Sues Over Durbin Amendment Posted by AVCU on 12:36 PM

Credit Union Times, and many other news outlets, are reporting that TCF National Bank, a subsidiary of TCF Financial Corporation in Minnesota, has filed a suit in federal court challenging the constitutionality of the Durbin Amendment. The amendment, part of Congress' recently enacted financial services reform law, directs the Federal Reserve to set debit card interchange for banks of $10 billion or more in assets. The Fed can choose to apply it to those under $10 billion as well. The debit card interchange level is supposed to reflect only the costs related to authorizing, clearing and settling debit card transactions.


TCF says the new law amounts to “an irrational competitive disadvantage” for banks subject to the new regulation. TCF believes its Constitutional rights will be violated. According to TCF's president, “The statute makes no more sense than regulating the price of a Burger King hamburger solely to the costs of the meat and the bun. To stay in business, Burger King has to sell burgers at prices that cover more than those costs; it also has to cover costs such as paying an employee to make the hamburger and another employee to serve it, the cost of the building and maintenance, as well as the costs incurred to advertise and promote the product. Under the Durbin Amendment, TCF only gets to recover the cost of the bun!”