Eight is Enough? My Vote For the Most Important Case Of The Year

October 3, 2016 at 8:12 am Leave a comment


Today is the first Monday in October; which means it is the first day of the new Supreme Court term; which means you get  deluged with  articles describing the year’s most important cases; which means that your faithful blogger doesn’t want to miss out on the fun.

Here is my sleeper pick for a case that could have a profound impact on the way the credit card system works and the way associations operate:  Osborn v. Visa Inc., 797 F.3d 1057, 1061 (D.C. Cir. 2015), cert. granted, 136 S. Ct. 2543 (2016) .

Visa and MasterCard rules stipulate that no ATM operator may charge customers whose transactions are processed on Visa or MasterCard networks a greater access fee than that charged to any customer whose transaction is processed on an alternative ATM network. Thus as the appellate court noted, under the Access Fee Rules, operators cannot say to cardholders: “We will charge you $2.00 for a MasterCard or Visa transaction, but if your card has a Star or Credit Union 24 bug on it, we will charge you only $1.75.”  A group of independent nonbank ATM operators and a consumer who paid debit card fees assert that these rules illegally restrain the efficient pricing of ATM services.  They characterize the Access Fee Rules as constituting an “anti-steering” regime that prevents independent ATM operators from incentivizing cardholders to choose and use cards “that are more efficient and less costly than either Visa or MasterCard’s.”

On appeal, the court made two rulings that will be reviewed: (1) that the economic harm caused by consumers who had to pay higher ATM fees was sufficient harm to challenge the legality of the ATM fees and (2) whether card issuers have violated antitrust laws by merely agreeing to the Visa and MasterCard rules.

In other words, depending on how this case is decided the ability of card issuers to be on a level playing field with each other when it comes to honoring all card requirements could be in jeopardy. In addition, card issuers could face litigation over Visa and Mastercard rules not just from merchants and ATM operators  but from disgruntled consumers,  Finally,  just how much can Association’s do in coordinating industrywide activity without running afoul of the antitrust laws? It may not be the type of case that gets the family arguing with each other over the dinner table but it could  impact the way everyone reading this post does business.

What Would You Do If You knew You Had Five Minutes To Live?

That was the question posed by Rabbi Kenneth Berger in a Yom Kippur sermon he delivered in the aftermath of the Challenger shuttle tragedy in which the astronauts are believed not to have died until  the shuttle crashed into the sea. The sermon was highlighted in this  article over the weekend and I’ve been thinking about it ever since. Here is my favorite quote:

“The explosion and then five minutes. If only I… If only I… And then the capsule hits the water, it’s all over. Then you realize it’s all the same — five minutes, five days, 50 years. It’s all the same, for it’s over before we realize. “‘If only I knew’ — yes, my friends, it may be the last time. ‘If only I realized’ — yes, stop, appreciate the blessings you have. ‘If only I could’ — you still can, you’ve got today.”




Entry filed under: Legal Watch, Regulatory. Tags: , , .

NY’s Credit Card Surcharge Ban To Get Supreme Court Review Basic Account Protections Extended To Prepaid Cards

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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