CUNA has filed papers with the U.S. Supreme Court to challenge a law prohibiting merchants from imposing surcharges for using payment cards, but not prohibiting cash discounts.
In the amicus brief, filed on Wednesday, CUNA asked the court to uphold the New York law stating, “The New York law is especially critical for credit unions, who have a statutory mission to serve consumers of modest means and who often can provide credit cards only if an adequate number of cardholders is maintained.”
A similar law in California was declared unconstitutional in 2015. The New York case in question, Expressions Hair Design v. Schneiderman, argues that the state law impacts the First Amendment right to free speech. The Supreme Court has agreed to hear arguments of the case.
According to court papers filed by CUNA, “Petitioners emphasize the New York law’s incidental effects on speech. But the fact that a law regulating economic conduct incidentally affects speech does not trigger any heightened requirements under the First Amendment. A contrary rule would subject countless economic regulations, including every price control statute, to First Amendment scrutiny.”
In a statement, CUNA’s President/CEO Jim Nussle said, “CUNA is resolute in our work to inform the judicial system about this issue.” Nussle’s statement continued, “It is a push for a fee by merchants in 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.”
Currently, 10 other states including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma and Texas – and Puerto Rico have similar laws in place.
While the Supreme Court has agreed to hear the case, it has not been scheduled for a hearing. To read the full court document, click here.
