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On January 20, 2015, the U.S. Supreme Court announced thatthey had rejected the request from a merchant group to have the Court hear itsarguments against Federal Reserve rules that regulate interchange and the dualnon-affiliated EFT network routing requirement. This decision leaves a lower Appeals Court decision intact – keeping theFederal Reserve’s rules in place.
The merchant group, comprised of the National RetailFederation (NRF), NACS, Miller Oil, Boscov’s Department Store LLC, the FoodMarketing Institute, and the National Restaurant Association, were disappointedby the decision. The NRF said it willcontinue its efforts to reduce excessive debit card pricing.
“The court’s decision isdisappointing because it leaves merchants and their customers paying far morethan intended by Congress,” Mallory Duncan, senior vice president and generalcounsel at the NRF, said in a statement. “The court’s ruling means retailerswill keep paying billions of dollars more than they should and that fee-hungrybanks will continue to rake in unearned profits that ultimately come out ofconsumers’ pockets. We will continue to press the issue.”
On the other side of the fight, the American BankersAssociation applauded the U.S. Supreme Court and repeated their claim that themerchants are keeping the savings from the Federal Reserve cap resulting fromthe Durbin Amendment.
“The Supreme Court has reached theright result today, but we shouldn’t lose sight of the fact that the underlyingpolicy–the Durbin Amendment– has not accomplished its goal of lowering pricesfor consumers,” the banking trade group said in a statement. “At theend of the day, American consumers have paid the price for the efforts ofbig-box retailers to line their pockets at their own customers’ expense.”
The likelihood of the U.S. Supreme Court hearing this appealwas almost non-existent since only 1% of such petitions for U.S. Supreme Courtreview are granted.
This seems to put the debit pricing and routing requirementsarguments to rest, at least for the time being.
Overview by Ron Mazursky, Director, Debit Advisory Service for Mercator Advisory Group
Read full story in Digital Transactions