Fed, merchants get expedited court action on interchange appeal
The U.S. Court of Appeals for the District of Columbia Circuit moved quickly to approve a request for expedited action on the Federal Reserve Board’s appeal in the case known as NACS v. Board of Governors of the Federal Reserve System. The court’s approval was issued yesterday–the same day the request was filed.
On Thursday, the merchant plaintiffs in the debit card interchange lawsuit and the defendant Fed filed jointly an emergency motion asking the appeals court for quick action in the case. Specifically, the parties asked the D.C. circuit to move on the Fed’s appeal that attempts to overturn a lower court ruling that the regulator’s implementation of the Dodd-Frank Act debit card interchange fee was faulty and should be scrapped.
In the emergency motion the merchants asserted that every day the existing final rule is left in place potentially causes merchants “irreparable injury” because the cap is too high.
The Fed argued that expedited treatment is necessary because to vacate the existing rule before a resolution of the appeal “would eliminate the existing regulatory limits on the amount of fees that merchants can be required to pay in connection with each debit card transaction subject to the rule and thus allow the unrestrained imposition of fees by card networks and issuers on the businesses that accept debit cards–precisely the practice that the statute sought to prevent.” The Fed further claimed that expedited treatment is necessary to provide “timely guidance and certainty about the rules and procedures governing the millions of debit card transactions being conducted every day–a matter of unusual public interest.”
The Fed said it could not adopt an interim regulation while the appeal is pending without mooting the appeal. A decision is expected soon from the district judge regarding whether he will leave the stay in place throughout the appeal, a request the Fed, merchants, and financial institutions all have told the judge is the right step.continue reading »