Restaurant industry takes swipe-fee fight to Supreme Court

Restaurant industry takes swipe-fee fight to Supreme Court https://wahospitality.org/wp-content/uploads/2013/02/creditcarda388-388x198.jpg

The restaurant industry, through the National Restaurant Association, continues to battle for fair debit-card swipe fees.

Along with a coalition of merchant groups and businesses, the NRA has asked the U.S. Supreme Court to hear its appeal of a January U.S. Court of Appeals ruling that upheld the Federal Reserve’s rule allowing card issuers to charge some merchants inflated debit-card swipe fees.

The coalition filed its petition with the Supreme Court on Monday. The court isn’t expected to announce whether it will hear the case until January.

The NRA has been fighting exorbitant swipe fees for years. The coalition argued in its brief that the 21-cents-per-transaction limit the Fed imposed on debit-card swipe fees violates the 2010 Durbin Amendment passed by Congress that called for fees that are “reasonable and proportional” to the cost of the transaction.

The Fed initially proposed a 12-cent cap, but raised that to 21 cents in its final rule.

The Fed’s own research has shown that 90 percent of debit-card transactions cost less than two cents to process. The coalition estimates that the Fed’s final rule is costing U.S. merchants an extra $4 billion in swipe fees each year, compared to the cap the Fed initially proposed.

The coalition won the first round of the legal battle in July 2013, when U.S. District Court Judge Richard Leon ruled that the Fed’s swipe-fee regulations violated congressional intent by allowing inflated transaction fees, especially for merchants with low-ticket transactions. However, in January, a three-judge panel in the U.S. Court of Appeals overturned Leon’s ruling and upheld the Fed’s final rule.

The Food Marketing Institute, National Association of Convenience Stores, the National Retail Federation, Boscov’s Department Store and Miller Oil Company are the other members of the coalition.

(Source: National Restaurant Association)

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