WASHINGTON, Oct. 12 (UPI) -- A bank based in Minnesota has filed a lawsuit challenging a debit card fee rule mandated by the Dodd-Frank financial reform bill as unconstitutional.
TCF National Bank filed a lawsuit in U.S. District Court in South Dakota challenging the bill that mandates the Federal Reserve set an interchange fee that is "reasonable" and "proportional" to the expense incurred by banks, The Hill newspaper reported Tuesday.
"We have filed this lawsuit because we believe this law is unconstitutional," said William Cooper, chairman and chief financial officer of TCF Financial Corp., the bank's holding company.
Sen. Dick Durbin, D-Ill, who proposed that provision in the bill, said, "The law in no way addresses the fees TCF or any other bank can charge and it does not set interchange rates.
"Our language simply ensures that debit interchange fees charged to retailers by the card networks -- not the banks -- are 'reasonable and proportional' to the cost of processing transactions and provides competition in an area of the market where there's none," Durbin said in a statement.