WASHINGTON—In a move that should stabilize the debit interchange landscape, the Supreme Court ruled Tuesday to deny merchants’ request for review of the Appeals Court ruling in NACS vs. Board of Governors of the Federal Reserve.
The NACS vs. Board of Governors of the Federal Reserve decision upholds the Fed’s debit interchange rule and rejects arguments that the rule’s debit interchange fee is too high based on the wrong factors.
On March 21, 2014, the United States Court of Appeals for the District of Columbia overturned Judge Richard Leon’s District Court decision that shot down the Federal Reserve's rule limiting the fees that financial institutions can charge merchants for processing debit card transactions.
On August 18, 2014, merchants filed a petition for a writ of certiorari to the Supreme Court regarding their suit challenging the Federal Reserve Board's debit interchange fee standard.
“NAFCU is pleased the Supreme Court will not reconsider the court of appeals decision in NACS vs. Board of Governors of the Federal Reserve,” said NAFCU SVP of Government Affairs and General Counsel Carrie Hunt. “This will help maintain stability in the marketplace, which is good for consumers and credit union members. NAFCU remains concerned that the current interchange cap imposes below-cost caps on interchange fees and fails to provide for a reasonable return for credit unions. We will continue to vigorously support a fair interchange fee for credit unions.”
CUNA President Jim Nussle issued a statement that the Supreme Court made the “correct decision” for credit unions and consumers. “The Fed’s rules aren’t perfect for credit unions – but after years of fighting, we appreciate the ability to move forward.”
Related
2013 Federal Reserve Report on Interchange