Pub. 3 2013 Issue 4

11 FALL 2013 Young & Associates, Inc. C o n s u l t a n t s t o t h e F i n a n c i a l I n d u s t r y 53 YEARS CELEBRATING 1978 - 2013 John Fahrendorf 602.321.9463 Kyle Curtis 602.903.2975 Guiding financial institutions through the planning process for 35 years Phoenix, AZ • Kent, OH At Young & Associates, Inc., we focus on proven methodologies for enhancing long-term pro tability, e ective capital utilization, and optimizing shareholder value within the accepted appetite for risk. Our goal is to build the planning process that best meets the needs of your bank and helps you create a vision for the bank’s short and long-term future. • Strategic Planning • Capital Planning • Profit Planning • Budgeting • Liquidity Planning equipment, and labor; (2) transaction monitoring costs; (3) an allowance for fraud losses (the ad valorem component); and (4) network processing fees”—all so long as the fixed costs were specific to particular debit card transactions. The Plain- tiffs disagree, arguing that only the incremental costs should be included in the debit card issuers’ calculations. Second, argue the Plaintiffs, the Board should require issu- ers to utilize two unaffiliated networks to process every type of authorization available for each debit card transaction. In other words, the Plaintiffs felt that the Board should insist that issuers allow two unaffiliated networks for all signature authorization transactions and two unaffiliated networks for all PIN authorization transactions. Unfortunately for bankers everywhere, the Plaintiffs pre- vailed on both counts. On July 31, 2013, the Court issued its memorandum opinion which stated that the Board “clearly disregarded” the intent of Congress in creating Regulation II. The Court found that the only appropriate remedy was to vacate Regulation II—claiming that Regulation II as written was completely “irredeemable.” The Court wisely recognized that its decision would be very disruptive to market participants who had “already made extensive commitments in reliance on [Regulation II].” The Court agreed to delay the vacatur of Regulation II for a limited period of time to allow the Board to develop a new Regulation II. However, the Court was clear that it envi- sioned a stay of “months, not years.” It is not entirely clear what the outcome of these issues will be. As of the time this article is submitted for publication, the Board has indicated its intent to appeal the Court’s decision to the United States Court of Appeals for the District of Colum- bia. Additionally, the Board has asked the Court to stay the effect of its decision pending a decision from the Court of Appeals—a position the Plaintiffs support. It may be some time before this matter is resolved and market participants have any real clarity on these issues. w Jeremy Goodman is a transaction, regulatory, and trial attorney focused on the representation of banks and other creditors. Jeremy’s legal advice is informed by his practical banking experi- ence, having worked in the consumer and small business division of Bank of America and the corporate trust division of Wells Fargo. Additionally, he is a graduate and former executive student advisor of the Pacific Coast Banking School at the University of Washington—the Nation’s premier national graduate school of banking. This practical perspective is key to Jeremy’s ability to counsel and interact credibly with institutional clients on sophisticated banking matters. Ted Stokes graduated Magna Cum Laude from Phoenix School of Law in May of 2013. Among other things, Ted interned for the Honorable Thomas LeClaire and at the Staff Attorneys Office of the Arizona Court of Appeals, Division One. Ted has acquired practical skills in the banking industry working for both creditor and debtor attorneys and from his involvement with the Turnaround Management Association. Currently, Ted awaits his Arizona Bar Examination results while working asa law clerk at The Law Offices of J.D. Denny.