No. 13-5270 NACS, FORMERLY KNOWN AS NATIONAL ASSOCIATION OF CONVENIENCE STORES, ET AL., APPELLEES v. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, APPELLANT. Appeal from the United States District Court for the District of Columbia (No. 1:11-cv-02075). Decided March 21, 2014.
“TATEL, Circuit Judge: Combining features of credit cards and checks, debit cards have become not just the most popular noncash payment method in the United States but also a source of substantial revenue for banks and companies like Visa and MasterCard that own and operate debit card networks. In 2009 alone, debit card holders used their cards 37.6 billion times, completing transactions worth over $1.4 trillion and yielding over $20 billion in fees for banks and networks. Concerned that these fees were excessive and that merchants, who pay the fees directly, and consumers, who pay a portion of the fees indirectly in the form of higher prices, lacked any ability to resist them, Congress included a provision in the Dodd-Frank financial reform act directing the Board of Governors of the Federal Reserve System to address this perceived market failure. In response, the Board issued regulations imposing a cap on the per-transaction fees banks receive and, in an effort to force networks to compete for merchants’ business, requiring that at least two networks owned and operated by different companies be able to process transactions on each debit card. Merchant groups challenged the regulations, seeking lower fees and even more network competition. The district court granted summary judgment to the merchants, concluding that the rules violate the statute’s plain language. We disagree. Applying traditional tools of statutory interpretation, we hold that the Board’s rules generally rest on reasonable constructions of the statute, though we remand one minor issue—the Board’s treatment of so-called transactions-monitoring costs—to the Board for further explanation.”