A group of retailers has filed a lawsuit in federal court that claims that the Federal Reserve did not follow the law when it adopted the Durbin Amendment.
“The Federal Reserve was required by law to come up with swipe fees that were ‘reasonable’ and ‘proportional’ but what we got were neither,” National Retail Federation senior vice president Mallory Duncan said, NRF.com reports. “Instead, the Fed allowed themselves to be influenced by the very banks they are supposed to regulate and raised the originally proposed cap to include expenses the law said were not allowed. In doing so, they literally gave away half the savings that could have been seen by merchants and their customers. We want them to go back and follow the law this time.”
The NRF, the Food Marketing Institute and National Association of Convenience Stores, says that the failure has allowed large banks to continue charging unfairly high swipe fees and has discouraged price competition among credit card networks.
Retailers have also complained that the cap led to an increase in swipe fees for some small-ticket purchases.
Plaintiffs listed on the lawsuit include NRF, Boscov’s Department Store and Miller Oil Co., which is a member of NACS.
The lawsuit was filed on Tuesday in the U.S. District Court in Washington, D.C., NRF.com reports.