The Retail Industry Leaders Association (RILA) today issued the following statement in response to the U.S. Court of Appeals ruling overturning a U.S. District Court decision that a Federal Reserve rule capping debit card swipe fees violated congressional intent.
“We are disappointed with the court’s unnecessarily narrow reading of important bipartisan reforms that Congress enacted to lower fees borne by merchants and consumers in debit card transactions,” said Deborah White, RILA General Counsel. “The Federal Reserve regulations at the heart of the case fell well-short of the mark to achieve Congress’s goal. The court’s ratification of this ‘half a loaf’ approach deprives merchants and consumers of the savings that Congress intended. Nonetheless, the fight against the Visa/MasterCard duopoly transcends any single judicial decision and we will continue the effort to bring fairness and competition to the broken debit and credit markets.”
RILA was not a party to the case. The Retail Litigation Center, directed by the chief legal officers of the country's leading retail companies, filed an amicus brief on the Federal Reserve’s interpretation of the exclusivity provisions of the law.
Debit swipe fee reform, passed by Congress in 2010, required the Federal Reserve to ensure that the fees charged to merchants that accept debit cards be “reasonable and proportionate” to the cost of the transaction. The law exempted 99 percent of all banks and applied only to those banks with more than $10 billion in assets. In 2010, after aggressive lobbying by Visa, MasterCard and the biggest banks, the Federal Reserve capped debit swipe fees for non-exempt institutions at roughly 24 cents, more than three times higher than the cap it had proposed just months before and more than five times higher than the Federal Reserve found such transactions to cost. In July 2013 the U.S. District Court ruled that the implementation rules for debit swipe fee reform established by the Federal Reserve were inconsistent with the intent of the law.
RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
The Retail Litigation Center is a public policy organization that identifies and engages in legal proceedings which affect the retail industry. The RLC, whose members include some of the country’s largest retailers, was formed to provide courts with retail industry perspectives on significant legal issues, and highlight the potential industry-wide consequences of legal principles that may be determined in pending cases.