by Scott Kelly and Michael Lacy
Counsel for the National Association of Convenience Stores, the National Retail Federation, and the Food Marketing Institute, among other retailers, indicated this week that they will file a petition for certiorari to the United States Supreme Court for review of a March 2014 D.C. Circuit decision involving debit card “swipe fees.”
In 2011, the Federal Reserve finalized debit card interchange fee rules – a task assigned to it under the Dodd-Frank Act – that included the Durbin amendment, a rule aimed to boost competition in the debt card transaction market with lower swipe fees for merchants. Ultimately, the Federal Reserve set a final cap on fees of 21 cents per transaction after significant lobbying efforts by major credit card companies. Many small-transaction retailers, however, complained that the final rule and higher transaction fees would disproportionately affect their businesses.
Those retailers later filed suit in the U.S. District Court for the District of Columbia and obtained a favorable decision from District Judge Richard J. Leon, who vacated the Durbin amendment. On appeal, the D.C. Circuit overturned that decision, finding that the Federal Reserve had appropriately determined the costs that issuers could included when setting their fees. The appellate court concluded that Congress had empowered the Fed to draft the debit card interchange fee rules and determine the best possible manner to implement them.
Now, the retailers will seek Supreme Court review of that decision. They have filed a motion for an extension of time until July 21, 2014 to file their cert petition. If denied, their petition will be due on June 19.
Read more at Consumer Financial Services Law Monitor by Troutman Sanders LLP.
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