NACS v. Board of Governors
On March 21, 2014, the U.S. Court of Appeals for the District of Columbia Circuit overturned the July 31, 2013, opinion of the U.S. District Court for D.C. in the case of NACS, f/k/a National Association of Convenience Stores, et al v. Board of Governors of the Federal Reserve System (see BOL's Top Stories for August 1, 2013). The lower court had ruled that the Board's interchange transaction fee (Regulation II, 12 CFR § 235.3(b)) and network non-exclusivity (§ 235.7(a)(2)) provisions should be remanded to the Board with instructions that they be vacated, on the grounds that the Board had disregarded Congress's statutory intent in crafting the language of those Regulation II provisions. The Board appealed from the District Court ruling. The Court of Appeals found that the Board's rules do not violate the plain language of the statute (the so-called "Durbin Amendment" to the Dodd-Frank Act), but remanded to the Board of Governors for further explanation the matter of the Board's treatment of transactions-monitoring costs. The Court of Appeals reversed the District Court's grant of summary judgment to the merchants, and remanded the case for further proceeding.