It’s not easy to win one against The Fed. The U.S. Supreme Court shot down a petition by NACS and other pro-merchant groups that challenged the Federal Reserve’s rule on debit-card interchange fees.
“It is unfortunate that the Supreme Court would not hear about the legal problems with the Federal Reserve’s debit swipe-fee rules,” said Lyle Beckwith, who as NACS’ senior vice president of government relations has been fighting against excessive credit- and debit-card fees for two decades.
The challenge was sparked when The Fed approved rates that, while lower than former figures, were well above what was implied in the language included in the landmark 2010 Dodd-Frank Consumer Protection & Wall Street Reform Act.
Under Dodd-Frank, the Federal Reserve was required to adopt regulations that would result in debit-card swipe fees that were “reasonable and proportional” to the actual cost of processing a transaction. Incremental costs of authorizing, clearing and settling each transaction were allowed to be considered, but fixed costs were not.
Pro-retail activists went in a tizzy when the Federal Reserve Board of Governors ignored its own staff recommendation of a 12-cent ceiling per transaction and instead adopted 21 cents after heavy lobbying from the financial services industry.
In its filing to the Supreme Court, The Fed argued the justices didn’t need to get involved because the legal issues in the case had no implications beyond the debit-fee rules. It also said that even under the retailers’ interpretation of Dodd-Frank, there was no guarantee that the Fed would cap debit fees as low as the merchants wanted.
Piping Up for Keystone
As the March issue of CSP went to press, President Obama exercised only his third veto since taking office. As expected, the president bucked Congress and pulled the plug on legislation authorizing construction of the Keystone XL pipeline.
Keystone supporters have portrayed construction as a boon for labor, a win for energy independence and a nod toward a modicum of bipartisanship in both Houses. Opponents have cited serious environmental concerns and cast doubt over long-term energy yield.
Perhaps more important than the measure itself is the symbolism. Beltway Republicans are expected to turn Keystone into a presidential election issue for 2016.
With the president’s veto, the House and Senate would need significantly more votes to achieve a two-thirds majority necessary to override a presidential veto, making passage of Keystone unlikely in 2015.
Exercise Our Excise
With the federal Highway Trust Fund teetering toward insolvency, another lawmaker is seeking to raise the cost on a gallon of gas.
U.S. Rep Earl Blumenauer (D-Ore.) reintroduced legislation that would add 15 cents to the current 18.4-cent-per-gallon gas tax and increase the diesel tax from 24.4 cents to 39.3 cents.
While the majority of House Republicans oppose any new tax, others agree that raising the federal gas tax is the most viable long-term revenue option for the Highway Trust Fund. And support of a higher excise tax cuts traditional party lines. Among the backers are the U.S. Chamber of Commerce, AFL-CIO and the American Trucking Associations. Industry groups such as NATSO and SIGMA have stated previous support of raising the tax on condition that such funds directly aid the Highway Trust Fund.
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