Dive Brief:
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A 2010 banking reform law known as Dodd-Frank stipulated that the Federal Reserve cap debit card swipe fees. Those fees were 44 cents per transaction, set by Visa and MasterCard and reimbursed to banks by businesses like retailers where the transactions take place.
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In 2011 the Federal Reserve capped the fees at 21 cents per transaction, but retailers argued that Dodd-Frank intended them to be even lower, and sued the Federal Reserve.
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While a U.S. district court in July last year agreed, the Federal Reserve appealed and won. The retailers are now turning to the Supreme Court to reverse the appellate court ruling.
Dive Insight:
Retailers have seen in the Dodd-Frank law the opportunity to drive down bank fees that they say end up being passed on to consumers. At a time when retailers face intense price pressure, these fees add up and eat into the bottom line.
It's unclear what chance the retailers have to get their case heard. Unlike appellate courts that hear every case brought to them, the Supreme Court is presented with more than 10,000 cases each term but takes up only a tiny fraction. With these, they provide written opinions in 80 to 90 cases and dispose of another 50 to 60 that they consider but do not grant a hearing, or plenary review.
