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UPDATE: FEES, JURISDICTION, WAGES
updated 07/10/14 10:49 AM
Latest Legal News for CUs
In NACS v. Federal Reserve System, Case No. 13-5270 (D.C. Circuit; March 21, 2014), the Court of Appeals for the D.C. Circuit upheld the Federal Reserve’s rules imposing a 21-cent-per-transaction cap (plus an adjustment of 5 basis points of transaction value) on debit-card swipe fees.

It also upheld the Fed’s requirement that at least two networks owned and operated by different companies be able to process transactions on each debit card (12 C.F.R. Part 235). Merchant trade associations challenged the rules, arguing the Fed did not correctly interpret the statute, and the rules did not go far enough.

In reversing the district court’s grant of summary judgment in favor of the merchant groups, the court of appeals determined the Fed’s rules were based upon reasonable constructions of the statute.

The rules arose from the so-called Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (15 U.S.C. §1693o-2). It amends the Electronic Funds Transfer Act to require that interchange fees are “reasonable and proportional” to issuer costs in connection with the transaction.

It requires the Fed’s board to consider incremental costs incurred by the issuer for its role in the authorization, clearance, or settlement of a debit transaction (“ACS costs”), but not other costs incurred not specific to a particular transaction. It also permits the board to allow for certain fraud prevention costs.

Additionally, the Durbin Amendment requires the Fed to establish standards for determining whether these requirements are met.

The merchant groups argued the Fed was permitted to consider only incremental ACS costs in setting the interchange fee, and the district court agreed. However, the court of appeals concluded the statute provided the Fed with greater discretion. Notwithstanding, it remanded the treatment of transaction monitoring costs back to the Fed to provide further explanation.

Click here to read the entire Legal column within the June/July edition of Credit Union Digest on Page 17, including commentary on questions of federal jurisdiction, as well as the latest California minimum wage requirements.

 
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SUPP. CAPITAL FOR RBC GAINS ADVOCATE updated 12/16/14 11:04 AM
McWatters Supports Model for CUs
National Credit Union Administration (NCUA) Board Member J. “Mark” McWatters recently said he supports including a supplemental capital provision in the agency's risk-based capital (RBC) rule to help credit unions meet the rule’s requirements.

CU DIRECT TO DONATE 20K TO CMN updated 12/16/14 11:03 AM
‘20 for 20’ Anniversary Campaign
CU Direct, the nation’s leading provider of lending, automotive, and strategic solutions for credit unions, is celebrating its 20th anniversary by holding a contest to donate $20,000 to one of the nation’s Children’s Miracle Network (CMN) hospitals.

NCUA MAY BE LIABLE FOR DATA BREACH updated 12/16/14 10:05 AM
Flash Drive with Member Info Lost
The National Credit Union Administration (NCUA) confirmed on Dec. 15 that a flash drive containing the personal information of Palm Springs FCU member was lost during a recent audit. The loss of data includes names, addresses, Social Security numbers, and account information.

PREPARE FOR HEALTH CARE REQUIREMENTS updated 12/16/14 09:42 AM
Also, Digital Media and Marketing
Federal health care law requirements, creating a quick digital message, and the marriage of innovation with marketing are all highlighted within the latest “Problem? Solved!” column in Credit Union Digest!