The National Retail Federation (NRF) has expressed approval of the U.S. Supreme Court's decision to allow a lawsuit challenging the Federal Reserve's 2011 cap on debit card “swipe” fees to proceed. The lawsuit argues that the cap was set too high, despite claims that the suit was filed beyond the allowable time frame.
“There are multiple reasons why the statute of limitations has not expired in this case,” said NRF Chief Administrative Officer and General Counsel Stephanie Martz. “The bottom line is that a small business harmed by a faulty regulation should not be denied its day in court based on a technicality, especially one that has been in dispute. The Federal Reserve set the cap far higher than intended by Congress and merchants like Corner Post have paid millions of dollars too much as a result, in turn driving up prices for their customers. That harm is ongoing and hasn’t been changed by the passage of time. The Supreme Court has made the right decision by allowing this lawsuit to be decided on its merits.”
The ruling supports a 2021 federal lawsuit initiated by Corner Post, a truck stop and convenience store in Watford City, North Dakota, with support from both the North Dakota Retail Association and the North Dakota Petroleum Marketers Association. While NRF is not directly involved in the case, Martz serves as co-counsel.
Central to this case was whether it fell outside of the six-year statute of limitations for challenging most federal regulations. Filed ten years after regulations took effect, plaintiffs argued that updates made in 2015 reset this period. Additionally, Corner Post only began operations in 2018 and thus claimed it wasn't affected until then. Although five federal appeals courts ruled against Corner Post, the 6th U.S. Circuit Court of Appeals determined that the six-year limit begins when an entity is aggrieved.
The lawsuit contends that under pressure from banks, additional costs were included beyond those stipulated by Congress under the Durbin Amendment—a 2010 law aimed at making debit card swipe fees "reasonable" and "proportional" to banks' costs. Initially proposed limits ranged between 7-12 cents per transaction but were later adjusted to include fixed costs and fraud-related expenses resulting in caps significantly higher than initially intended.
Since implementing these caps, reviews conducted every two years revealed declining bank costs which have not proportionally adjusted downward caps as required by law—raising concerns among retailers about excessive fees being passed onto consumers.
In response to ongoing discrepancies between actual costs and capped amounts found through recent surveys showing average bank costs dropping further since initial implementation—the Fed proposed new lower rates last October while maintaining certain fraud-related adjustments prompting comments from NRF advocating further reductions aligned with original proportions mandated under Durbin Amendment guidelines alongside tiered rate structures reflecting varying transaction volumes among different banks
Historically prior unregulated transactions averaged around $0 .45 per typical debit usage saving merchants approximately $9 .4 billion annually following regulation changes benefiting consumers via significant cost savings ultimately contributing towards economic stability across broader retail sectors nationwide
As leading representatives within retail industry advocating fair practices surrounding transactional processing fee structures over past two decades – NRF continues championing equitable solutions fostering sustainable growth opportunities supporting diverse range stakeholders spanning local community enterprises through global commerce networks alike
