NRF seeks Supreme Court review of debit card swipe fees
The National Retail Federation (NRF) has petitioned the U.S. Supreme Court to review a ruling that left the cap on debit card swipe fees at 21 cents rather than reducing it to a lower level.
A petition asking the Supreme Court to reconsider their plea was filed by NRF and other trade bodies and a few retailers, all of whom were plaintiffs in the original lawsuit.
“This case is of staggering importance and the economic burden of this error will be felt virtually every time a consumer swipes a debit card”, the petition said.
Under the Dodd-Frank Consumer Protection and Wall Street Reform Act of 2010, the Federal Reserve was required to adopt regulations that would result in debit swipe fees that were “reasonable and proportional” to the actual cost of processing a transaction.
Incremental costs of authorizing, clearing and settling each transaction were allowed to be considered, but fixed costs were not.
“The Fed calculated the average incremental cost at 4 cents per transaction and initially proposed a cap no higher than 12 cents, but eventually settled on 21 cents after heavy lobbying from the financial services industry”, says NRF.
“There’s so much at stake here for US retailers and their customers, that we have no choice but to pursue this case as far as possible,” NRF General Counsel Mallory Duncan informs.
He adds, “When a federal agency blatantly disregards the clear intent of legislation passed by Congress and signed into law by the president, that’s a dispute that cannot be ignored”.
While lower than the average of 45 cents before the cap was set, NRF argued that the 21-cent figure included costs that went beyond those allowed under the legislation and filed suit against the Fed in U.S. District Court in 2011 along with other retail groups.
In July 2013, Judge Richard Leon ruled in NRF’s favor and ordered the Fed to recalculate the cap at a lower level, but the Fed appealed.
This March, the U.S. Court of Appeals for the District of Columbia overturned Leon’s ruling, citing “ambiguity” in the 2010 law, by saying, the Fed based the cap on a “reasonable interpretation” of the measure.
Fibre2fashion News Desk - India