Fed, Merchants File Motion to Extend Stay of Interchange Ruling (Aug. 27, 2013)
Aug. 27, 2013
The Federal Reserve Board of Governors has filed a motion to extend the stay of a July 31 court decision that invalidated the agency’s rules implementing debit interchange and network routing requirements under the Durbin Amendment. The consent order, filed Monday in U.S. District Court in Washington, D.C., requests that Judge Richard Leon extend the stay he issued on his own July 31 ruling, which left in place the existing interchange and routing regulations and gave the Fed time to decide whether it would appeal the ruling or rewrite the rules. During a hearing before Judge Leon last week, the Fed said it would appeal the July 31 decision and argued for the stay to be extended while the appeal process plays out.
Monday’s motion to continue the stay was filed with the consent of lawyers for the merchant plaintiffs in the case, which sued the Fed in 2011 on the grounds that the interchange fee caps set by the agency were too high. The merchants argued for an extension of the stay on the grounds that even what they see as flawed regulations are preferable to no limits on interchange at all. If the stay is lifted during the appeal, debit interchange could theoretically return to pre-Durbin levels. Both parties also have pushed for an expedited appeal process, which could land the case in U.S. Circuit Court in Washington, D.C., within the next nine months to a year.
The next hearing in the case is set for Wednesday, during which the parties are expected to issue briefs on the possibility of the Fed issuing an interim rule that would take effect while the case is being appealed. Both sides however, have said an interim rule would create undue confusion and compliance complications.