Federal Reserve to Appeal Swipe Fee Ruling
WASHINGTON, D.C. -- Three weeks after a federal judge struck down the swipe fee rules governing debit card transactions, an attorney for the Federal Reserve said the board plans to appeal.
Scott Alvarez, the Fed's general counsel, told a judge in court today that the Fed will seek to keep the rules in place while it appeals the case, according to Reuters.
The Fed's appearance comes after U.S. District Judge Richard Leon ruled that the Federal Reserve disregarded Congress' intent when it decided how much banks can charge retailers to process debit card transactions. As part of the decision, the Fed was instructed to rewrite the rules governing swipe fees. The current 21-cent cap went into effect in October 2011, as CSNews Online previously reported.
A group of retail associations, including NACS, the Association for Convenience & Fuel Retailing, the Food Marketing Institute, the National Restaurant Association and the National Retail Federation, filed suit in November 2011, claiming they would be "substantially harmed" by the fees set by the Fed. All of the associations are members of the Merchants Payments Coalition, a group of retailers and organizations concerned about the rising costs of swipe fees on both debit and credit cards.
In his July 31 ruling, Leon wrote: "Upon consideration of the pleadings, oral argument and the entire record therein, the court concludes that the board has clearly disregarded Congress' statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction. Accordingly, the plaintiffs' motion is granted and defendant's motion is denied."