DC Circuit Durbin Decision Available on PLA

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We have added the DC Circuit Court of Appeals “Durbin” decision to our Regulatory and Compliance Resources page (you can find it here). The decision overturned a lower court’s ruling that had largely vacated the “Durbin Amendment,” a set of rules adopted by the Federal Reserve in 2011 governing interchange fees and network routing for debit transactions. Relying heavily on Chevron deference (and schooling us about cars which are blue that have sunroofs… or is it cars that are blue which have sunroofs?), the Circuit Court agreed with the Fed that Congress left much to the Fed’s administrative discretion due to both inherent ambiguities in the statute and in some cases by express directive. The only issue that technically remains in flux is whether the Fed can reasonably justify its determination that transactions-monitoring costs properly fall outside fraud-prevention adjustment costs, and thus can be recovered as part of the interchange fee. (The court remanded this issue back to the Fed to provide such justification to complete the record, but without vacatur because the Court pretty much assumed that the Fed would in fact come up with something – anything – that was reasonable.) Otherwise, it appears that the Durbin Amendment, as adopted by the Fed and implemented by issuers and networks in countless ways, has been restored to all its glory.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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