Supreme Court Will Not Hear Durbin Case
Jan. 22, 2015
The U.S. Supreme court yesterday declined to review an appellate decision affirming the caps on debit interchange and network routing requirements formulated under the Durbin Amendment to the 2010 Wall Street reform package. Last March, Judge Richard Leon of the U.S. Court of Appeals reversed a lower court decision that had overturned the Durbin rules at the behest of retailers who felt the caps still left interchange fees too high. In August, a group of retailers filed a petition asking the Supreme Court to review the decision and again declare the final rule formulated by the Fed—capping the fees charged by issuing banks on each debit transaction at 21 cents—void. On Tuesday, the high court declined to hear the petition.
“Federal agencies have flexibility in implementing our nation’s laws, but do not have the discretion to blatantly ignore the wishes of elected officials and the clear language of the statute,” said Mallory Duncan, general counsel for the National Retail Federation, one of the petitioners. “The court’s ruling means retailers will keep paying billions of dollars more than they should, and that fee-hungry banks will continue to rake in unearned profits that ultimately come out of consumers’ pockets.”
Financial institutions, of course, had a different take. Tim Pawlenty, CEO of the Financial Services Roundtable, a coalition of banks and financial services companies, said: “At a time when the payment system is so rapidly innovating and evolving, we are pleased to see the courts won’t be advancing the ill-advised price controls of the Durbin Amendment.”
Duncan promised retailers “will continue to press the issue,” noting pending litigation on credit-card interchange and continuing effort to lobby Congress on the issue.