Last April, the North Dakota Retail Association and the North Dakota Petroleum Marketers Association sued the Federal Reserve Board in federal court for not doing its job to keep debit interchange in line with the requirements of the Durbin Amendment of the 2010 Wall Street Reform and Consumer Protection Act. I was hoping this lawsuit would give the debit card industry an idea of what the Fed and the courts were thinking about the current level of regulated debit card interchange that is applied to all debit cards issued by banks with $10 billion or more in assets. As Payments Dive reported, we won’t get that insight, at least not from this case, as it was thrown out of court based on a statute of limitations which requires a complaint of this sort to be filed within six years. Since regulated interchange was set in 2011, the judge ruled it was too late to file a complaint now.
Here’s more from the story:
A federal judge in North Dakota last Friday dismissed a lawsuit brought by retail trade groups against the Federal Reserve Board over the central bank’s regulation of debit card fees paid by merchants to process those consumer payments.
U.S. District Court Judge Daniel Traynor, presiding over the case in Bismarck, North Dakota, dismissed the case on March 11, siding with a Federal Reserve motion arguing that a six-year statute of limitations on challenging federal agency actions had elapsed.
The lawsuit argued that the Federal Reserve Board “has failed to properly follow Congress’s instructions to ensure that debit-card processing fees are reasonable and proportional to the costs of debit-card transactions.” It was filed last April by the North Dakota Retail Association and the North Dakota Petroleum Marketers Association.
Under the law, the Fed is required to perform a biennial survey to review card issuer banks’ costs that are the basis for the existing fee cap, and to reset it, if necessary. In an assessment last May, the Fed left the cost basis that underpins the existing debit card fee cap unchanged. The Fed hasn’t modified the cap since it first set the cost basis in 2011.
You can find a previous article regarding the current battle over interchange levels here.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group