Supreme Court sides with retailer in debit card swipe fee case


The Supreme Court has handed retailers a victory in their fight against debit card “swipe fees.”

The high court ruled 6-3 on Monday (July 1) in favor of plaintiffs in a case challenging the Federal Reserve's rules on how much businesses pay banks when customers use debit cards to make purchases.

The store, Corner Post and other plaintiffs claim the Fed’s Regulation II violates debit card swipe fees.

A lower court dismissed the lawsuit, saying the plaintiffs had missed the six-year statute of limitations that applies to such lawsuits. Last year, the Supreme Court agreed to hear an appeal over the timeliness of the lawsuit.

In Monday's ruling, the court's conservative majority found that the six-year statute of limitations only begins to run out when a plaintiff is affected by the statute.

While Monday's ruling is likely to be overshadowed by the outcome of another matter, an immunity case involving former President Donald Trump, a decision in The Post's favor could have broader ramifications, leaving plaintiffs Easier to challenge federal regulations.

U.S. President Joe Biden's administration has said as much, according to a Reuters report on Monday, which noted that the White House argued that agreeing with the plaintiffs “would significantly expand the class of potential challengers to government regulations” and potentially “increase the number of government burden”. institutions and courts. “

Swipe fees, also known as “interchange fees,” are used to reimburse banks for the costs associated with offering a debit card. These fees are determined by card networks, but the Federal Reserve caps fees at 21 cents per transaction.

The Fed also proposed lowering the cap further to 14 cents, a move that smaller banks said would make it harder for them to fight financial crime because the fees would help them invest in anti-fraud measures.

The National Retail Federation, meanwhile, argued that even with a seven-cent reduction, the fee would still be too high and that lower costs for issuers would mean “the country's largest issuers are struggling under the proposed rule.”

Meanwhile, another case involving swipe fees continued last week, with a federal judge rejecting a $30 billion settlement proposed by Visa and Mastercard with merchants in a decades-long lawsuit.

U.S. District Judge Margot Brody said the companies could handle a “substantially” larger settlement and argued the proposal would “disproportionately and unfairly” benefit small local merchants over the likes of Walmart and Target Large chain stores.




Source link

Leave a Reply

Your email address will not be published. Required fields are marked *