Supreme Court Declines Review of NACS’ Swipe Fee Claim

Retailers’ suit challenging Fed rule on debit swipe fees will not be heard by highest court.

January 21, 2015

ALEXANDRIA, Va. – On Tuesday, the U.S. Supreme Court denied the request by NACS, the Food Marketing Institute, the National Retail Federation, the National Restaurant Association, Miller Oil and Boscov’s department stores to have the Court review the Federal Reserve’s debit swipe fee rules. 

NACS and the other plaintiffs filed the initial lawsuit challenging the Federal Reserve’s swipe fee rules soon after they became effective in 2011. The lawsuit argued that the rule was not consistent with the language of the law passed by Congress as part of the Dodd-Frank Wall Street Reform Act, and challenged the amounts of debit swipe fees and lack of merchant choices for card networks under the Fed’s rule.

NACS’ suit was successful in the U.S. District Court in 2013, with a ruling by U.S. District Court Judge Richard Leon finding that the Fed’s rule ran “completely afoul of the text, design and purpose” of the law. That decision was later overturned on appeal by the D.C. Circuit Court of Appeals. In August, NACS asked the Supreme Court to take the case in order to settle the question, but the Court declined to do so. At this point, the Circuit Court decision, which largely upheld the Fed’s rule, will stand.

“It is unfortunate that the Supreme Court would not hear about the legal problems with the Federal Reserve’s debit swipe fee rules,” said NACS Senior Vice President for Government Relations Lyle Beckwith. “Banks should not be allowed to use centrally price-fixed fees to make margins of 500% to 1,000% or more on debit swipe fees. The Supreme Court would have recognized that those fees are not consistent with the reforms passed by Congress and it’s unfortunate they won’t have the chance to make that decision. Nonetheless, the Fed should now see the error of its ways and revise its rules to correct the gross deficiencies in them.”

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