WASHINGTON — Retailers on Wednesday applauded a federal judge’s decision to strike down the way the Federal Reserve had set debit card swipe fees, calling the ruling “a major victory for supermarket shoppers.”
U.S. District Court Judge Richard Leon said the Federal Reserve misapplied the intent of 2010 swipe-fee overhaul in Congress, resulting in higher fees resulting from including costs that were not intended to be a part of the fee. Retail groups including Food Marketing Institute, National Retail Federation, National Restaurant Association and the National Association of Convenience Stores had brought the suit.
"We are delighted that the court agreed that the Federal Reserve Board exceeded its authority under the law in nearly doubling the interchange fees banks are allowed to charge merchants for debit transactions,” FMI said in a statement. “This ruling marks a major a victory for supermarket shoppers and will ultimately result in lower costs at the checkout line by billions."
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The ruling means the Federal Reserve Board must come up with a new rule.
“Congress clearly told the Fed to introduce competition and transparency into the debit card marketplace by making multiple networks available, so as to reduce swipe fees for merchants and their customers,” Mallory Duncan, senior vice president and general counsel of NRF, said in a statement. “The Fed failed to do so, and the court rightly ruled against them as a result. Today’s decision is the first step in setting these initial wrongs right and will ensure that swipe fee reform is done correctly.”
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