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Court revives debit card 'swipe fees' challenge by convenience store

Robert Besser
6 Jul 2024

WASHINGTON, D.C: Businesses could challenge some federal rules more effectively with the U.S. Supreme Court this week reviving a challenge to a Federal Reserve regulation by a North Dakota convenience store on debit card "swipe fees".

The 6-3 decision reversed a lower court's dismissal of the 2021 lawsuit by the Corner Post, challenging the 2011 rule governing the amount businesses must pay banks when customers use debit cards to make purchases. The dismissal had been based on the store missing a six-year statute of limitations that generally applies to such litigation.

Swipe fees, also known as interchange fees, reimburse banks for costs involved in using debit cards. The issue in the case was whether Corner Post was too late when it brought its legal challenge. The store argued that it should not be bound by the six-year statute of limitations to challenge the 2011 regulation because it opened for business in 2018 after that deadline.

Various conservative and corporate interest groups backed Corner Post, including billionaire Charles Koch's network and the U.S. Chamber of Commerce. They said businesses should have wide latitude when challenging regulations that are considered unlawful and burdensome.

The store argued that the six-year time limit should not begin until a business is adversely affected, which for Corner Post would be March 2018, when it accepted its first debit card payment.

President Joe Biden's administration, representing the Federal Reserve Board of Governors, had argued that adopting Corner Post's legal position "would substantially expand the class of potential challengers" to government regulations and threaten to "increase the burdens on agencies and courts."

Some small business associations had asked the Supreme Court for a strict statute of limitations that begins when a regulation is finalized. They said allowing lawsuits beyond this deadline "would create chaos, uncertainty and inconsistent regulatory regimes for the nation's regulated industries and the American people the regulations seek to serve."

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