CUNA files amicus brief in Texas interchange case

WASHINGTON, DC (August 5, 2015) — The Credit Union National Association (CUNA) filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit arguing that allowing merchants to add additional surcharges to credit card transactions would allow merchants to shift the cost of these payments, known as interchange fees, to consumers. The case, Rowell et al v. Pettijohn in the Texas Western District Court, involves a group of merchants challenging a Texas state law that prohibits merchants from imposing a surcharge on a buyer who uses a credit card.

“Without the Texas surcharge ban, merchants would be able to add additional fees on to products when consumers use their credit card as payment, and shift the cost of these electronic payments to consumers,” said Jared Ihrig, chief compliance officer at CUNA. “This would be inappropriate because merchants receive a number of benefits from participating in the credit card system, including increased sales, being able to keep staff levels low, allowing for transactions at any time through automated or online processes, fraud protection and insufficient fund loss protection. Consumers should be protected through standardized pricing so that the posted price is the amount that card users pay.”

Merchants claim that surcharging credit card transactions would likely reduce the use of credit cards for payments. If that were to happen, many credit unions and other smaller institutions would re-evaluate their credit offerings and possibly exit the market. This would result in consumers having fewer credit cards from which to choose, forcing them to rely on only a handful of large issuers for credit and debit cards.

Surcharging was prohibited under federal law until the statute expired in 1984, and Visa and MasterCard banned surcharging as part of their network agreements. A 2013 antitrust case caused the bans to be removed from those agreements, making the state bans more relevant.

Three other cases across the country are pending in Florida, New York and California, all involving similar arguments as the Texas case.  CUNA filed an amicus brief in the Florida district court which has ruled surcharges to be unconstitutional. The New York Credit Union Association has filed an amicus brief for the case in that state, which is under appeal. The California case is still pending.

About CUNA

Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 135 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit To find your nearest credit union, visit


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