The U.S. Supreme Court says it will not review the Federal Reserve’s rules on how much banks can charge retailers for debit card transactions. The fees, now capped at 21 cents per transaction, averaged as high as 44 cents in 2009 before the 2010 Dodd-Frank financial reform law imposed a cap. That cap was first proposed at 12 cents.
A retail group led by the National Retail Federation, the National Association of Convenience Stores and several other groups challenged the cap, saying it cost retail $3 billion a year.
“The court’s decision is disappointing because it leaves merchants and their customers paying far more than intended by Congress,” NRF SVP and general counsel Mallory Duncan said in a statement today. “Federal agencies have flexibility in implementing our nation’s laws, but do not have the discretion to blatantly ignore the wishes of elected officials and the clear language of the statute. The court’s ruling means retailers will keep paying billions of dollars more than they should, and that fee-hungry banks will continue to rake in unearned profits that ultimately come out of consumers’ pockets. We will continue to press the issue.”
Frank Keating, president and CEO of the American Bankers Association said in a statement, “The Supreme Court has reached the right result today, but we shouldn’t lose sight of the fact that the underlying policy — the Durbin Amendment — has not accomplished its goal of lowering prices for consumers. The Durbin Amendment has significantly harmed consumers and financial institutions. At the end of the day, American consumers have paid the price for the efforts of big-box retailers to line their pockets at their own customers’ expense.”