ATLANTA (11/5/15)--The U.S. Court of Appeals for the 11th Circuit struck down Florida’s no-surcharge fee law Wednesday. CUNA filed an amicus brief in the case in March, outlining a number of policy issues surrounding credit card interchange fees, and arguing that allowing surcharges would pass the cost of accepting credit card payments to consumers, while still allowing merchants the benefits of system participation.
Interchange fees occur when a credit card transaction takes place, and are how credit unions are compensated for making cards available to merchants. Florida merchants, in Dana’s Railroad Supply v. Bondi, sought a change in Florida’s laws that ban additional surcharges to consumers using credit cards, arguing that such a fee is equivalent to free speech.
CUNA argued that allowing merchants to charge additional surcharges to credit card transactions would lead to less credit card use, which could force credit unions to exit the credit card market, making it more difficult for them to compete with larger financial institutions to attract and retain members.
CUNA has filed similar briefs in similar cases in Texas and California. In September, credit unions saw a victory in a similar case in New York, where the 2nd U.S. Circuit Court of Appeals said an anti-surcharging law was not a violation of free speech.