The attorney who prepared CUNA’s amicus brief in the ongoing U.S. Supreme Court case regarding merchant surcharges on credit card transactions has another important role in the lawsuit.
Jonathan F. Cohn, a partner of international law firm Sidley Austin LLC, will also help prepare Steven Wu, of the New York attorney general’s (AG) office, to present the AG’s oral arguments in the case on Jan. 10.
CUNA filed its brief in December to strongly back the AG’s position in the case, Expression Hair Design v. Schneiderman. The plaintiff challenges a New York law prohibiting merchants from imposing a surcharge for using a payment card, but does not prohibit cash discounts.
CUNA’s amicus brief warns, among many strong points, that the legal push for a fee by merchants is an attempt to shift their costs of using electronic payments to consumers and financial institutions, while continuing to allow merchants to receive the benefits of participating in the system.
“The merchants’ surcharge suit just adds insult to injury to consumers where interchange fees are involved,” notes Lance Noggle, CUNA senior director of advocacy. “Prior to passage of the Durbin amendment in the Dodd-Frank Act, merchants repeatedly pledged to use the savings realized under the interchange fee cap to serve consumers through actions such as lower prices and other advantages.
“Significant research, which includes a 2016 study by the Federal Reserve Bank of Richmond, has found that more than 75% of merchants did not reduce prices. It found, in fact, that nearly one in four merchants have actually increased prices post-Durbin.
“This new case represents more of the same disregard merchants have for the nation’s consumers,” Noggle adds.
Oral arguments for Expression Hair Design v. Schneiderman are scheduled for Tuesday. CUNA will be present.
The case has potential impact on a number of surcharge-related cases around the country, including several that CUNA is involved in. It also could impact related issues involving debit and prepaid card transactions.