Earlier today, U.S. District Judge Richard Leon ruled on litigation brought in November 2011 by a group of merchants against the Board of Governors of the Federal Reserve System (“NACS v. Board of Governors of the Federal Reserve System”) that sought to overturn the Board’s Final Rule setting standards for debit card interchange fees and network exclusivity provisions (so-call Regulation II).
Ruling on summary judgment in favor of the merchant plantiffs, Leon concluded that “the Board has clearly disregarded Congress’s statutory intent by inappropriately inflicting all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction.”
In his decision, he goes on: “It appears that the Board completely misunderstood the Durbin Amendment’s statutory directive and interpreted the law in ways that were clearly foreclosed by Congress.”
Judge Leon is inviting the parties to provide supplemental briefings on the issues of how to adjust the rules – and staying any change for the moment – but noting that he is inclined toward a stay of vacatur “for months, not years.”
US Merchants Win Victory in Debit Card Interchange Litigation
Payments News – from Glenbrook Partners
Payments News ISSN 1556-4487. Compilation Copyright © Glenbrook Partners LLC, 2002-2013. All Rights Reserved.