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Removing Barriers Blog

CUNA Fights Merchants’ Credit Card Surcharging in the Supreme Court
Posted December 21, 2016 by CUNA Advocacy

CUNA filed an amicus brief in the Supreme Court today that supports credit union members’ ability to use credit cards without being charged a fee or surcharge.  The brief supports a New York State law that prohibits merchants from adding a surcharge to the price of goods and services when a credit card is used for payment.  The merchants sued New York State claiming that the law violates a merchant’s right of free speech because it allowed for cash discounts but not surcharges. 

CUNA’s brief makes the important point that surcharging credit card transactions may lead to consumers using other forms of payments, which could force credit unions and other smaller institutions to re-evaluate their credit offerings and possibly exit the market. This would result in consumers having fewer credit cards from which to choose, forcing them to rely on only a handful of large issuers for credit and debit cards.

CUNA has filed similar briefs in similar cases in  California,  in Texas where the state law was upheld, and in Florida where the state law was held to be unconstitutional.  New York won the initial appeal in the 2nd Circuit Court of Appeals where the New York Credit Union Association filed an amicus brief supporting the anti-surcharging law.  The New York Credit Union Association also filed an amicus brief with the Supreme Court. 

The Supreme Court agreed to hear the case, Expression Hair Design v. Schneiderman, in June. Eric Schneiderman is the attorney general of New York.  Arguments are set for Jan. 10, which CUNA will attend.