WASHINGTON, D.C. – Attorneys representing NACS urged a federal appeals court to uphold U.S. District Court Judge Richard Leon’s ruling that the Federal Reserve clearly disregarded Congress’ intent by inappropriately inflating all debit card transaction fees by billions of dollars, which have continued to allow financial institutions to charge exorbitant fees that are ultimately born by consumers.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in the case on January 17. The Federal Reserve is seeking to reverse Judge Leon’s ruling from July 31, 2013, that found the Fed allowed inflated debit-card swipe fees and neglected to bolster competition among payment networks.

“The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 required the Federal Reserve to set guidelines that would result in debit card swipe fees that are "reasonable" and "proportional" to banks' costs in processing debit card transactions,” said NACS President and CEO Henry Armour. “Unfortunately, the Federal Reserve chose to ignore the law,” he added, in reference to the Durbin Amendment. 

"The Fed's job was to implement the law as written and it did not do that,” said Doug Kantor, a partner at the Washington law firm of Steptoe & Johnson and lead counsel in the lawsuit. “Consumers are continuing to be gouged and financial institutions are continuing to reap huge profits. We hope that the court will affirm Judge Leon’s decision and force the Federal Reserve to implement the law as Congress intended.”

NACS filed the suit challenging the Federal Reserve’s rules along with the Food Marketing Institute, National Restaurant Association and the National Retail Federation.