Mastercard and Durbin
The Likely Appeal by the Federal Reserve"The Federal Reserve should certainly consider action to stay the district court decision challenging the rule," says Frank Mayer, a partner in the Financial Services Practice Group of Pepper Hamilton LLP in Philadelphia. "One issue is whether the district court has properly deferred to the congressionally deemed expert federal agency rule maker. This is known as Chevron deference." "Generally a court must defer to the expert federal agency in their rule-making, absent a finding that the statute was unambiguous and the rule is inconsistent with congressional intent and the agency failed to abide by the administrative procedures act," Mayer says. The Fed in an appeal is likely to challenge Judge Leon's view that the Durbin Amendment's language on costs that may be included in the maximum allowed interchange fee is ambiguous. "Congress has not in recent years asked a federal agency to establish prices for goods and services," Mayer says. "In asking the FRB to establish interchange fees that are 'reasonable and proportionate,' Congress moved away from that trend and many federal agencies lost experience establishing fair pricing and competition." So Congress named the Fed the expert on analyzing and setting the interchange fees and rules for requiring more merchants to have more than one choice for processing debit card transactions, but Judge Leon has challenged the expert's opinions. When considering the possibility of a lengthy appeals process, Mayer says "Time exigencies are critical as continuing uncertainty hurts commerce for everyone."
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