Under the Act's Durbin amendment, the Federal Reserve Board is mandated to limit the amount of interchange fees that banks can charge retailers on debit card transactions.

The amendment directs the Fed to measure the processing costs of authorising, clearing and settling debit card transactions and then to adopt regulations setting interchange rates based on those costs alone.

TCF says these processing costs amount to only a fraction of the total required to manage the debit card system and deliver the product. The bank also claims that amendment "explicitly mandates" the Fed to ignore other costs incurred by banks.

TCF also objects to the amendment's provision that exempts banks with less than $10 billion or more in assets. This leaves just one per cent of banks affected, leaving them in an "irrational competitive disadvantage".

William Cooper, chairman and CEO, TCF, says: "The statute makes no more sense than regulating the price of a Burger King hamburger solely to the costs of the meat and the bun. To stay in business, Burger King has to sell burgers at prices that cover more than those costs; it also has to cover costs such as paying an employee to make the hamburger and another employee to serve it, the cost of the building and maintenance, as well as the costs incurred to advertise and promote the product. Under the Durbin Amendment, TCF only gets to recover the cost of the bun!"

The bank has been backed by the Electronic Payments Coalition, which says in a statement: "From the very beginning, the interchange battle has been a blatant attempt by giant retailers to take advantage of an unstable economic and political environment to increase their own profits at the expense of their customers."