Retailers Appeal Interchange Ruling
A National Retail Federation petition to the Supreme Court filed on Aug. 18 claimed debit card interchange rates represent an issue of staggering importance.
The NRF, along with three other retail associations and two retail firms, said it wants the Supreme Court to hear an appeal of a March ruling that upheld the Federal Reserve's debit interchange rule.
“There's so much at stake here for U.S. retailers and their customers that we have no choice but to pursue this case as far as possible,” NRF Senior Vice President and General Counsel Mallory Duncan said in a prepared statement about the appeal effort. “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.”
Retailers have argued the Fed ignored legislative intent when it developed a debit interchange rule to implement the Durbin amendment, a portion of the Dodd-Frank financial reform law that capped debit card interchange for larger asset debit issuers and sought to foster more competition for debit transaction processing.
“The rule's importance will only continue to grow,” the retailers argued. “From 2003 to 2012, the number of debit card transactions tripled – from 15.6 billion to 47 billion annually; between 2009 and 2012, debit card transactions grew at an average rate of almost 8% annually … if this court denies review, then the rule's validity will be finally established. This case, which presents the only challenge to the rule, is the ideal vehicle to resolve the rule's validity.”
It was unclear whether the Supreme Court will hear the appeal of the decisions by the U.S. Court of Appeals for the D.C. Circuit. One leading credit union regulatory expert who declined to speak on the record observed the issue lacks conflict among different appeals courts or a controversy in law as is common with cases the highest court accepts.
“The retailers have to establish that some untested or new part of the law needs to be addressed by the Supreme Court, and that's going to be difficult,” the expert said.
If the Supreme Court accepts the case, it will announce the acceptance sometime in the fall, according to the court's website.