A federal district court in North Dakota has vacated the Federal Reserve’s Regulation II, a rule that sets standards for debit card swipe fees. The decision came in the case Corner Post, Inc. v. Board of Governors of the Federal Reserve System, where plaintiffs argued that the regulation allowed banks to charge small businesses excessive fees for debit card transactions. However, the court delayed implementation of its ruling while an appeal is pending.
Beth Milito, Vice President and Executive Director of NFIB’s Small Business Legal Center, commented on the outcome: “NFIB has been very vocal about the disproportionately high cost of swipe fees for small, independently owned businesses,” said Milito. “With cash payments becoming increasingly less common, these skyrocketing fees place an immense burden on small retailers, who already operate on narrow profit margins. Congress clearly outlined what the Federal Reserve should consider when setting the permissible amount of swipe fees and small businesses are relieved that the federal district court recognized the agency’s abuse of authority.”
NFIB joined with other organizations such as Retail Litigation Center, Inc. and Merchant Advisory Group to file an amicus brief in support of overturning Regulation II. They argued that it exceeded statutory authority under the Durbin Amendment and imposed undue costs on retailers nationwide.
The NFIB Small Business Legal Center continues to represent small business interests in courts across more than 40 active cases at both state and federal levels.
