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Wednesday, January 21, 2015

Supreme Court Lets Interchange Decision Stand

The Supreme Court declined to hear a challenge by the retail industry to the Federal Reserve Board’s debit interchange fee cap rule. The court’s decision leaves in place a D.C. Circuit Court of Appeals ruling from March 2014 upholding the Fed’s rule. The appellate court had reversed a 2013 lower court decision that would have required even lower debit interchange fee caps than the Fed’s rule calls for. ABA President and CEO Frank Keating said:

The Supreme Court has reached the right result, but we shouldn’t lose sight of the fact that the underlying policy — the Durbin Amendment — has not accomplished its goal of lowering prices for consumers. The Durbin Amendment has significantly harmed consumers and financial institutions. At the end of the day, American consumers have paid the price for the efforts of big-box retailers to line their pockets at their own customers’ expense.

In the 2013 decision, a federal district judge said the Fed violated congressional intent in the Dodd-Frank Act by setting the interchange fee cap too high and failing to allow merchants to choose multiple unaffiliated PIN and signature networks for each card transaction they process.

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