NACS, Other Plaintiffs File Brief Supporting Swipe Fee Ruling

WASHINGTON, D.C. -- The retail industry this week filed a brief in support of a July decision to strike down the current swipe fee rules for debit cards. The issue will be brought before a three-judge panel in January, and merchant briefs in the case were filed on Wednesday.

According to a Wall Street Journal report, NACS, the Association for Convenience & Fuel Retailing, the Food Marketing Institute, the National Restaurant Association and the National Retail Federation submitted the brief backing U.S. District Court Judge Richard Leon's July 31 ruling that said the Federal Reserve disregarded Congress' intent when it decided how much banks can charge retailers to process debit card transactions.

As part of Judge Leon's decision, the Fed was instructed to rewrite the rules governing debit swipe fees. The current rules, in part, include a 21-cent cap.

The plaintiffs in the case contend the Fed's regulations created a loophole that would only make one processing network available for many transactions, instead of allowing for competition in processing networks.

"We want the Fed to redo the mistake that they made," said Doug Kantor, an attorney representing some merchants in the case, including NACS.

The Federal Reserve has until Dec. 4 to file its brief in the case. Oral arguments are set to begin in the U.S. Court of Appeals for the District of Columbia Circuit on Jan. 17. Circuit Judges David Tatel, Harry Edwards and Stephen Williams will hear the appeal.

The existing swipe fee rules were implemented in October 2011. Shortly after, the group of retail associations filed suit claiming they would be "substantially harmed" by the fees set by the Fed.