Advertisement

Merchants Push for Summary Judgment in Interchange Suit

March 12, 2012

Several merchant groups and two retailers, which filed a lawsuit against the Federal Reserve Board in November claiming the agency didn’t follow the intent of the Dodd-Frank Act when it finalized rules implementing the Durbin Amendment to regulate debit interchange and network routing and exclusivity, now are seeking summary judgment to end the case before it reaches a courtroom. The motion for summary judgment claims the rules exceed the authority granted to the Fed by Congress, and that the final rule is "arbitrary, capricious, an abuse of process and otherwise not in accordance with the law in violation of the Administrative Procedure Act.”

While the Durbin Amendment was seen as a win for merchants when it was passed, some—notably those that process a high volume of low-value transactions—actually saw the amount they pay in interchange rise when the card networks eliminated lower rates for small-ticket purchases.

The motion argues that the Fed’s final rule “greatly expanded the costs allowed in the interchange fee standard,” which resulted in “shifting billions of dollars in additional costs from the issuing banks to merchants that accept debit cards.” The suit also says the final rule mishandled the network non-exclusivity portion of the Durbin Amendment, resulting in “entire categories of debit card transactions—such as Internet and telephone transactions, hotel stays and car rentals—not being afforded the competitive network choice required by statute.”

On Thursday, the National Restaurant Association joined the Food Marketing Institute, the National Association of Convenience Stores, the National Retail Federation, Boscov’s Department Store and Miller Oil Co. in the suit.


  • Worldpay Reports End to Disruption - July 26, 2016
    Worldpay Reports End to Disruption

    On Sunday, e-commerce processor and acquirer Worldpay, which had experienced issues with delayed settlements for several weeks on one of its gateways, announced transactions now are processing normally.


Advertisement


  • Samsung Pay Launches in Brazil - July 19, 2016
    Samsung Pay Launches in BrazilToday, Samsung launched its contactless mobile payment solution, Samsung Pay, in Brazil with some of the biggest issuers in the country including Banco do Brasil, Brasil Pré-Pagos, Caixa, Porto Seguro, and Santander.
  • Apple Pay Coming to Websites - June 14, 2016
    Apple Pay Coming to Websites

    Apple Senior Vice President Craig Federighi announced during the company's Worldwide Developers Conference that consumers will be able to use Apple Pay to make online purchases through the Safari browser on iPhones, iPads and Macs before the holiday shopping season this year.

  • House Republicans Move to Repeal Dodd-Frank, Durbin Caps - June 9, 2016
    House Republicans Move to Repeal Dodd-Frank, Durbin 

CapsIn a speech on Tuesday, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said he will introduce legislation this month called the Financial CHOICE Act repealing parts of the controversial Dodd-Frank Act, including the cap on interchange banks can charge on debit transactions.

Advertisement

 

 

Sign Up Today Free

Receive the twice weekly CNP Report and monthly feature articles providing in-depth examinations of global CNP issues.

Please take a moment and register.
* First Name:

* Last Name:

* Password:

* Confirm Pwd:

* Email:

Category:

Company:

 
Captcha
Answer:

 

 

CNP Archive

Researching companies or people in the CNP industry? Search our past coverage for targeted news and information.

Search here