A group of lawmakers, led by Senator Ted Budd, R-N.C., aims to halt the Federal Reserve's proposal to lower debit card interchange fees. The Secure Payments Act would require the Fed to conduct a full impact study before proceeding. The current cap, set by the Durbin Amendment to the Dodd-Frank Act, is 21 cents and 5 basis points, with an additional penny for fraud prevention. The Fed proposes reducing it to 14.4 cents, 4 basis points, and 1.3 cents for fraud costs. Critics argue the proposal could harm consumers and disenfranchise low-income consumers, with banks scaling back low-cost accounts.
Budd highlighted the decline in free checking accounts and increased fees since the original caps in 2011. Trade associations for banks and credit unions support the Act, emphasizing the need for resources to serve rural and underserved communities and warning that the Fed's proposed changes could increase banking costs by $2 billion annually.
Electronic Payments Inc. introduced the POS Bill of Rights on June 25, 2024, to enhance merchant experiences by emphasizing transparency, trust, and satisfaction. Celebrating 24 years in business, the company prides itself on its consistent innovation within the payments industry. Founder and CEO Michael Nardy highlighted that Electronic Payments' success stems from supporting clients with advanced technology and relevant products.
The POS Bill of Rights, which includes principles like transparent pricing, reliable system uptime, data privacy, responsive customer support, and fair contract terms, underscores their commitment to merchants. Steve Messemer, the company's director of POS products, noted that this initiative will set new industry standards, ensuring reliable and supportive environments for businesses using EPI's systems. Nardy, who began Electronic Payments in his Boston College dorm room, has grown the company to serve thousands of merchants nationwide with over 1,000 agents and 150+ staff.
A federal district court judge in New York rejected a proposed $30 billion settlement intended to resolve a nearly 20-year legal battle between merchants and card giants Visa and Mastercard. The lawsuit, filed in 2005, accused the card brands and banks of inflating interchange fees and engaging in anti-competitive practices. In March 2024, a proposed settlement aimed to lower interchange fees by four basis points, halt fee increases for four years, eliminate anti-steering rules, and simplify dual pricing.
Merchants, represented by groups like the National Grocers Association and the Merchants Payments Coalition, welcomed the decision, arguing the settlement would have allowed continued price-fixing and insufficiently addressed rising swipe fees. The National Retail Federation criticized the negotiations for excluding many merchants. Visa and Mastercard expressed disappointment, maintaining that the settlement was fair and beneficial.
The U.S. Supreme Court allowed a North Dakota merchant to sue the Federal Reserve over debit card interchange caps, despite the merchant opening for business after the statute of limitations expired. Historically, the six-year limit for federal regulation lawsuits, under the Administrative Procedure Act, starts on the date of enactment.
However, the Supreme Court ruled that the limitations period begins when a business is injured by a regulation. In 2014, merchants sued the Fed, claiming the debit cap was too high, but the Supreme Court declined the case. In 2018, Corner Post Inc. opened a truck stop and convenience store and joined the lawsuit in 2021. Lower courts dismissed the case due to the expired statute of limitations. But on July 1, 2024, the Supreme Court reversed this. This ruling could prompt more lawsuits from businesses opening post-enactment. Merchant groups welcomed the decision, arguing ongoing harm from the high cap. However, dissenting justices warned it could eliminate any limitations period for APA lawsuits. 
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