NRF asks court to uphold lower swipe fee cap
Washington, D.C. – The National Retail Federation (NRF) has asked an appeals court to uphold a judge’s ruling that the Federal Reserve set its cap on debit card swipe fees far higher than intended by Congress and that the cap needs to be recalculated at a lower level.
A three-judge panel of the U.S. Circuit Court of Appeals is scheduled to hold a hearing in Washington, D.C., on Friday, Jan. 17 on the Federal Reserve’s challenge of U.S. District Court Judge Richard Leon’s July ruling that the 21-cent cap that took effect in 2011 was too high. The ruling came in a lawsuit brought by NRF and other groups.
Under the Durbin Amendment section of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Federal Reserve was required to adopt regulations that would reduce debit card swipe fees from an average 45 cents per transaction to a “reasonable” level “proportional” to banks’ cost for processing the transactions. The law allowed the Federal Reserve to consider the incremental costs of acquiring, clearing and settling each transaction but prohibited any other expenses from being included. The Federal Reserve estimated those costs at an average four cents and initially proposed a cap no higher than 12 cents, but eventually set the figure at 21 cents after heavy lobbying by banks. The NRF lawsuit claims the higher level includes costs that were barred by Congress.
Leon’s July ruling also agreed with NRF that the regulations failed to comply with a congressional requirement that at least two competing processing networks be available for each transaction regardless of whether consumers choose “credit” or “debit” when using a debit card. The requirement was intended to lower costs by increasing competition.
“Nearly four years after the law was passed, debit swipe fees are still far higher than they should be, and banks are raking in billions of dollars in unearned profits every year as a result,” NRF senior VP and general counsel Mallory Duncan said. “Instead of doing what Congress ordered, the Fed gave in to pressure from big banks – and retailers and their customers are paying the price. It’s time for the Fed to follow the law instead of catering to the industry it is supposed to regulate.”
Target plans new Ohio store
Minneapolis – Target plans to open a new store in Liberty Township, Ohio, in October 2014. The 130,000-sq.-ft. store will offer a selection of fresh produce, fresh packaged meat and pre-packaged baked goods, as well as a Starbucks and a Target Pharmacy.
To date, Target has announced plans to open 10 Target stores in 2014. The Liberty Township location will employ approximately 150 team members. Target will host job fairs approximately two months prior to the new store opening, at which prospective candidates may apply and interview for open team member positions.
IBM to expand global cloud offering
Armonk, N.Y. – IBM plans to commit more than $1.2 billion to significantly expand its global cloud footprint. This investment includes a network of data centers designed to bring clients greater flexibility, transparency and control of how they manage their data, run their businesses and deploy their IT operations in the cloud.
IBM plans to deliver cloud services from 40 data centers worldwide in 15 countries and five continents globally, including North America, South America, Europe, Asia and Australia. IBM will open 15 new centers worldwide, adding to the existing global footprint of 13 global data centers from SoftLayer and 12 from IBM. Among the newest data centers to launch are China, Washington, D.C., Hong Kong, London, Japan, India, Canada, Mexico City, and Dallas. With this announcement, IBM plans to have data centers in all major geographies and financial centers with plans to expand in the Middle East and Africa in 2015.
IBM plans to establish SoftLayer, an automated cloud hosting services provider it acquired in 2013, as the foundation of its cloud portfolio. The SoftLayer infrastructure will provide a scalable, secure base for the global delivery of cloud services spanning IBM’s middleware and SaaS solutions. IBM recently established the IBM Watson Group, a new business unit dedicated to the development and commercialization of cloud-delivered cognitive and Big Data innovations. As part of this initiative IBM will also deploy Watson on SoftLayer.
"IBM is continuing to invest in high growth areas," said Erich Clementi, senior VP of IBM Global Technology Services. "Last year, IBM made a big investment adding the $2 billion acquisition of SoftLayer to its existing high value cloud portfolio. Today’s announcement is another major step in driving a global expansion of IBM’s cloud footprint and helping clients drive transformation."