• D.C. District Court to Vacate Key Provisions of Regulation II
  • August 7, 2013
  • Law Firm: Alston Bird LLP - Atlanta Office
  • In a memorandum opinion released July 31, 2013, in NACS v. Board, the D.C. District Court held that the Board of Governors of the Federal Reserve System (the “Board”) “clearly disregarded” the intent of Congress in developing the interchange fee limitations and network exclusivity requirements set forth in Regulation II, Debit Card Interchange Fees and Routing (“Regulation II”). The plaintiffs (a group of merchant trade associations and two individual merchants), asserted that the Board exceeded its statutory authority by (i) considering costs other than those expressly stated in the Durbin Amendment when setting the interchange fee limitation applicable to certain debit transactions and (ii) determining that an issuer may comply with the Durbin Amendment’s network diversity requirements by enabling a single PIN debit network and a single signature debit network on its debit cards. In a strongly worded opinion, the court agreed with the plaintiffs’ contentions, granted the plaintiffs’ motion for summary judgment and declared its intent to vacate the challenged sections of Regulation II and remand to the Board for new rulemaking.