According to Bloomberg.com, the Federal Reserve is being sued by retailer groups over interchange fee regulations set forth by the Durbin Amendment, which went into effect Oct. 1.
The suit, filed by the National Retail Federation, the Food Marketing Institute, NACS and two other companies, claims that "the Board's final rule permits banks to recover significantly more costs than permitted by the plain language of the Durbin Amendment and deprives plaintiffs of the benefits of the statute's anti-exclusivity provisions."
Retailers previously paid an average of 44 cents per debit transaction, which the Durbin Amendment reduced to 21 cents. In the suit, the retailers claim that the Fed did not research the associated costs of a transaction before determining the final rule.
Additionally, the groups say the rule doesn't promote competition among payment networks because it allows only one network choice for signature debit transactions and one choice for PIN.
"Retailers won't truly be happy until they pay zero to accept cards," said Trish Wexler, spokeswoman for the Electronic Payments Coalition, a trade group representing payment networks Visa and MasterCard and banks including JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. "They don't want to pay their fair share of this system that brings them more sales and increased security, and want customers to foot the bill instead."
The case is NACS v. Board of Governors of the Federal Reserve System, 11-02075, U.S. District Court, District of Columbia (Washington).
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