NYCUA Supports NY’s Ban On Credit Card Surcharges

The ban on credit card surcharges in New York got support from the New York Credit Union Association (NYCUA), which filed an amicus brief with the U.S. Supreme Court in support of the move.

In a press release, the NYCUA said it “strongly supports the ban, which was upheld by the U.S. Court of Appeals for the Second Circuit in the case Expressions Hair Design v. Schneiderman.” In the brief, NYCUA General Counsel Henry Meier and Vice President of Governmental Affairs Michael Lieberman said New York passed the surcharge ban based on the understanding that surcharges and discounts are separate pricing and not interchangeable words. They argued the bank doesn’t regulate what merchants can say about the pricing structures, writing in the brief that “no-surcharge laws are economic regulations that do not infringe on merchants’ rights of free speech, and petitioners cannot invoke the First Amendment to accomplish in the Supreme Court what must be done in the chambers of Congress or state legislatures.”

In the brief, they went on to say that, in countries where surcharges are allowed, they ultimately become a source of revenue for the merchant instead of to get back transaction costs. What’s more, they said merchants exercise “monopoly control” over the size of the surcharge consumers pay. Credit card surcharges “promote misleading pricing tactics and dubious marketing schemes and do not construe pricing as merchant expression.” The NYCUA is urging the court to back the judgement of the appeals course in the case.

In September, the highest court in the land agreed to hear a challenge brought by several merchants contending that a law in New York State that bans surcharges should be considered a violation of free speech. State-specific laws — extant in nine other states in addition to New York — mandate that stores cannot state that they are imposing surcharges tied to credit card transactions. Rather, they must state that they are actually offering discounts if consumers pay with either cash or debit card. The merchants themselves, according to Bloomberg, would, of course, like to truncate the fees they incur known as “swipe fees” if they could, in fact, deter credit card use. That might come in the event that they would be allowed to levy explicit surcharges on those transactions tied to credit cards.