August 1, 2013 – US District Judge Richard Leon on Wednesday rejected the the Federal Reserve’s decision on debit cards swipe fees and as part of his 58-page ruling wrote, “The Board [Federal Reserve] has clearly disregarded Congress’s statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction.”
Unfortunately for retailers, Leon’s ruling will allow for the regulation to remain in place until new standards
A lawsuit filed by the National Retail Federation, the Food Marketing Institute and NACS, formerly the National Association of Convenience Stores. Oil Miller Co., a residential heating and air company based in Norfolk, Virginia, and Boscov’s Department Store LLC, based in Reading, Pennsylvania, claimed that fees the Fed set under the Durbin Amendment (a provision of the Dodd-Frank legislation) has “substantially harmed” merchants.
The group further complained that the “The board’s final rule permits banks to recover significantly more costs than permitted by the plain language of the Durbin Amendment and deprives plaintiffs of the benefits of the statute’s anti-exclusivity provisions.”
CASE: NACS vs. Board of Governors of the Federal Reserve System, 11-cv-02075, U.S. District Court, District of Columbia.
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