Financial Services Bulletin: The Federal Reserve Sued over the Durbin Amendment, the FDIC Clarifies Orderly Liquidation Rules, and New Financial Sector Taxes in the EU
TCF Financial Corp. Sues the Federal Reserve Over Debit Card Fees
On Tuesday, October 12, 2010, Minnesota-based TCF Financial Corp. filed a lawsuit against the Federal Reserve in order to declare the Durbin Amendment, found in the Dodd-Frank Wall Street Reform and Consumer Protection Act, unconstitutional. The Durbin Amendment allows the Federal Reserve to limit how much a bank with assets exceeding $10 billion can charge retailers when using a debit card. TCF argues that the Durbin Amendment favors small banks and, therefore, violates the bank's right to equal protection.
FDIC Clarifies Orderly Liquidation Rules
On Friday, October 8, 2010, the FDIC Board of Directors voted to approve a proposed rule clarifying how creditor claims would be addressed under the orderly liquidation authority provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the proposed rule would bar any additional payments to holders of long-term senior debt, subordinated debt, or equity interests resulting in the creditors recovering more than other creditors entitled to the same priority.
Read the FDIC press release
European Commission Outlines its Vision for Taxing the Financial Sector
On Thursday, October 7, the European Commission issued two proposals for the future taxation of the financial sector. The Commission proposed a Financial Transaction Tax (FTT) aimed at assisting to fund global challenges, such as climate change; and a Financial Activities Tax (FAT) targeting remunerations and profits of financial sector companies aimed at ensuring financial stability closer to home, in the European Union. The European Commission plans on presenting these ideas to the European Council in October and the G20 Summit in November.
Read the European Commission's press release
© 2010 Perkins Coie LLP