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Flawed Durbin Ruling Boosts Fed’s Odds: Guest Opinion

Since U.S. District Judge Richard Leon issued his shocking decision on July 31 that called for even more draconian price controls under Dodd-Franks Durbin Amendment, some legal commentators have given him the benefit of the doubt.

By John Berlau | Updated on August 23, 2013
Since U.S. District Judge Richard Leon issued his shocking decision on July 31 that called for even more draconian price controls under Dodd-Frank’s Durbin Amendment, some legal commentators have given him the benefit of the doubt.

They concede the Durbin Amendment is bad law, but they say Leon was correct in his interpretation of the amendment, which basically mandates the Federal Reserve not set price caps on what banks and credit unions charge for interchange fees on debit cards at any rate higher than retailers would like to pay them.

These commentators, some of whom I respect a great deal, simply overlook the incredible sloppiness in Leon’s ruling in NACS. v. Board of Governors of the Federal Reserve. Leon’s decision oozes with unprofessional snark, misconstrues economic terms in the statute’s language, and limits its research of “legislative intent” to the “intent” of one member of Congress who voted for the legislation: Sen. Richard Durbin (D-Ill.).

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