Breaking News: Fed to Appeal Interchange Ruling (Aug. 21, 2013)
Aug. 21, 2013
Certainty on debit interchange and network routing regulation isn’t likely any time soon. The Federal Reserve Board of Governors has decided to appeal a judge’s ruling requiring the agency to rewrite those rules. During a hearing today in U.S. District Court in Washington, D.C., the Fed’s lead attorney, Scott Alvarez, said the agency would appeal Judge Richard Leon’s July 31 decision striking down the Fed’s interchange and network routing rules. The ruling came in a lawsuit brought in 2011 by a group of merchants that claimed the interchange fee limits were set too high. While Judge Leon agreed that the interchange caps considered costs that weren’t permitted by the statute, he immediately issued a stay of his own decision to give the Fed time to decide if it wanted to appeal the decision or issue a new rule with lower fee caps.
Today’s hearing, also presided over by Judge Leon, came a week after a previous hearing, during which Alvarez told the judge the Fed had yet to decide whether or not to appeal. At the time, Judge Leon said the Fed already should have made progress toward a decision, and gave the agency another week to choose a course of action. During last week’s hearing, Leon also raised the possibility of merchants being repaid for fees that were collected under the current fee caps. Today, Alvarez said the agency would seek to keep the existing rules in effect during the appeal process, according to Reuters. Experts say an appeal could take up to another year.
