Durbin interchange fee battle rages on

by. Terry Dooley

The ongoing legal battle over swipe fees will continue in court next month. Oral arguments are scheduled for January 17 in the Federal Reserve Board’s appeal of district court Judge Richard Leon’s ruling that the Fed’s debit interchange rule did not conform with requirements of the Durbin Amendment.

As you’ll recall, these upcoming proceedings follow a chain of events resulting from Judge Leon’s July ruling, which declared the Fed’s debit interchange fee cap of 21 cents too high and its network non-exclusivity provisions inadequate. Leon said the Fed disregarded Congress’ intent when it decided how much financial institutions (FIs) 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 Fed filed for an appeal and sought a stay, which Judge Leon granted, while the appeal proceeds. The Fed filed written arguments on October 20, and merchants entered written briefs one month later.

Three judges will hear the arguments, which will take place in the U.S. Court of Appeals for the District of Columbia Circuit. It is expected that the side that doesn’t come out on top will petition for the case to be heard by the Supreme Court. If the court concedes to hear the case, it’s estimated that more than two years could pass before a final ruling is handed down.

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