Full opinion text
MEMORANDUM OPINION RICHARD J. LEON, District Judge. Plaintiffs NACS (formerly, the National Association of Convenience Stores), National Retail Federation (“NRF”), Food Marketing Institute (“FMI”), Miller Oil Co., Inc. (“Miller”), Boscov’s Department Store, LLC (“Boseov’s”) and National Restaurant Association (“NRA”) (collectively, “plaintiffs”) bring this action against the Board of Governors of the Federal Reserve System (“defendant” or “the Board”) to overturn the Board’s Final Rule setting standards for debit card interchange transaction fees (“interchange fees”) and network exclusivity prohibitions. Before the Court are the parties’ cross-motions for summary judgment [Dkts. ## 20, 23]. Upon consideration of the pleadings, oral argument, and the entire record therein, the Court concludes that the Board has clearly disregarded Congress’s statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction. Accordingly, the plaintiffs’ motion is GRANTED and defendant’s motion is DENIED. FACTUAL BACKGROUND Four of the six plaintiffs in this case are major trade associations in the retail industry. NACS is an international trade association comprised of more than 2,100 retail members and 1,600 supplier members in the convenience store industry, most located in the United States. Am. Compl. ¶ 15 [Dkt. # 18]. NRF is “the world’s largest retail trade association,” representing department, specialty, discount, catalog, Internet, and independent stores, as well as chain restaurants, drug stores, and grocery stores in over 45 countries. Id. ¶ 17. FMI advocates for 1,500 food retailers and wholesalers, including large multi-store chains, regional firms, and independent supermarkets. Id. ¶ 19. NRA is the “leading national association representing th[e] [restaurant and food-service] industry, and its members account for over one-third of the industry’s retail locations.” Id. ¶23. According to plaintiffs, these trade associations and their members accept debit card payments and therefore are directly affected by the Board’s interchange fee and network non-exclusivity regulations. Id. ¶¶ 16, 18, 20, 23-25. The remaining plaintiffs are individual retail operations. Miller is a convenience store and gasoline retailer that also sells heating oil, heating and air-conditioning service, and commercial and wholesale fuels in the United States. Id. ¶ 21. Boscov’s is an in-store and online retailer with a chain of forty full-service department stores located in five states in the mid-Atlantic region. Id. ¶ 22. Both accept debit cards. See id. ¶¶ 21-22. The Board is a federal government agency responsible for the operation of the Federal Reserve System and promulgation of our nation’s banking regulations. Id. ¶ 26. I. Debit Cards and Networks Although now ubiquitous, debit cards were first introduced as a form of payment in the United States in only the late-1960s and early-1970s. See Final Rule, Debit Card and Interchange Fees and Routing, 76 Fed.Reg. 43,394, 43,395 (July 20, 2011) (codified at 12 C.F.R. §§ 235.1-235.10) (“Final Rule”). Unlike other payment options, debit cards allow consumers to pay for goods and services at the point of sale using cash drawn directly from their bank accounts, and to withdraw and receive cash back as part of the transaction. Id. Prior to debit cards, consumers had to use paper checks or make in-person withdrawals from human bank tellers in order to access their accounts. Id. After decades of slow growth, the volume of debit card transactions increased rapidly in the mid-1990s, as did transactions involving other forms of electronic payment such as credit cards. Id. at 43,395 & n. 5. This upsurge in debit card usage continued into the 2000s, reaching approximately 37.9 billion transactions in 2009. Id. at 43,395. By 2011, debit cards were “used in 35 percent of noncash payment transactions, and have eclipsed checks as the most frequently used non-cash payment method.” Id. Most debit card transactions involve four parties, in addition to the network that processes the transaction. Id. at 43,395 & n. 14. These parties are: (1) the cardholder (or consumer), who provides the debit card as a method of payment to a merchant; (2) the issuer (or issuing bank), which holds the consumer’s account and issues the debit card to the consumer; (3) the merchant, who accepts the consumer’s debit card as a method of payment; and (4) the acquirer (or acquiring bank), which receives the debit card transaction information from the merchant and facilitates the authorization, clearance, and settlement of the transaction on behalf of the merchant. Id. at 43,395-96. The network provides the software and infrastructure needed to route debit transactions; it transmits consumer account information and electronic authorization requests from the acquirer to the issuer; and it returns a message to the acquirer either authorizing or declining the transaction. See 15 U.S.C. § 1693o-2(c)(11) (defining “payment card network”); 76 Fed.Reg. at 43,-396. In addition, “[b]ased on all clearing messages received in one day, the network calculates and communicates to each issuer and acquirer its net debit ... position for settlement.” 76 Fed.Reg. at 43,396. There are two types of debit card transactions — PIN (or “personal identification number”) and signature — each of which requires its own infrastructure. In a PIN transaction, the consumer enters a number to authorize the transaction, and the data is carried in a single message over a system evolved from automated teller machine (“ATM”) networks. Id. at 43,395. In a signature transaction, the consumer authenticates the transaction by signing something (like a receipt), and the data is routed over a dual-message system utilizing credit card networks. Id. “Increasingly, however, cardholders authorize ‘signature’ debit transactions without a signature and, sometimes, may authorize a TIN’ debit transaction without a PIN.” 76 Fed.Reg. at 43,395 & n. 10. The vast majority of debit cards (excluding prepaid cards) support authentication by both PIN and signature, but which one is used in a given transaction depends in large part on the nature of the transaction and the merchant’s acceptance policy. Id. at 43,395. For instance, hotel stays and car rentals are not easily processed on PIN-based systems because the transaction amount is unknown at the time of authorization. Id. Internet, telephone, and mail-based merchants also generally do not accept PIN transactions. Id. Of the eight million merchants in the United States that accept debit cards, the Board estimates that only one-quarter have the ability to accept PIN transactions. Id. II. Debit Card Fees There are several fees associated with debit card transactions. The largest is the interchange fee, which is set by the network and paid by the acquirer to the issuer to compensate the latter for its role in the transaction. Id. at 43,396; see also § 1693o-2(c)(8) (defining “interchange transaction fee”). The network also charges acquirers and issuers a switch fee to cover its own transaction-processing costs. 76 Fed.Reg. at 43,396; see also § 1693o-2(c)(10) (defining “network fee”). Once these fees are assessed, the acquirer credits the merchant’s account for the value of its transactions, less a “merchant discount,” which includes the interchange fee, network switch fees charged to the acquirer, other acquirer costs, and a markup. 76 Fed.Reg. at 43, 396. When PIN debit cards were first introduced, most regional networks set their interchange rates at “par,” offering no cost subsidization to either merchants or issuers. Some networks, however, implemented “reverse” interchange fees, which issuers paid to acquirers to offset the cost to merchants of installing terminals and other infrastructure needed to accept PIN at the point of sale. 76 Fed.Reg. at 43,396; Salop, supra note 1, ¶ 21; Mott, supra note 2, ¶ 7. Because this model eliminated the costs associated with paper checks and human bank tellers, issuers could provide debit services at a profit, even without collecting interchange fees. Furthermore, issuers touted the convenience of PIN-debit to their customers, and customers in turn maintained higher account balances, which issuers could loan out at a profit. Mott, supra note 2, ¶ 3. As debit cards became more popular, interchange fee rates and the direction in which the fees flowed began to shift. See 76 Fed.Reg. at 43,396. By the early-2000s, acquirers were paying issuers ever-increasing interchange fees for PIN transactions. See id. Interchange fees for signature transactions, meanwhile, were modeled on credit card fees and were even higher than for PIN. Id.; Salop, supra note 1, ¶ 23. In recent years, interchange fees have climbed sharply with PIN outpacing signature debit fees. From 1998 to 2006, merchants faced a 234 percent increase in interchange fees for PIN transactions, Mott, supra note 2, ¶ 24, and by 2009, interchange fee revenue for debit cards totaled $16.2 billion, 76 Fed.Reg. at 43,396. For most retailers, debit card fees represent the single largest operating expense behind payroll. Because debit card transaction fees, including interchange fees, are set by the relevant network and paid by the acquirer (on behalf of merchants) to the issuer, perhaps the best way to understand why such fees have skyrocketed over the past two decades is to recognize the market dynamics among the networks, issuers, and merchants. Although there are many debit card networks in the United States, networks under Visa’s and MasterCard’s ownership account for roughly 83 percent of all debit transactions and nearly 100 percent of signature transactions. Visa also owns Interlink, the largest PIN network. Due to their hefty market share, Visa and MasterCard exercise considerable market power over merchants with respect to debit card acceptance. See Sal-op, supra note 1, ¶ 35. Hundreds of millions of consumers use cards that operate on Visa’s and MasterCard’s debit networks. Id. ¶ 36. Merchants know that if they do not accept those cards and networks, they risk losing sales, and “losing the sale would be costlier to the merchant than accepting debit and paying the high interchange fee.” Id. At the same time, Visa, MasterCard, and other debit networks vie for issuers to issue cards that run on their respective networks. Id. ¶¶ 33, 43. They can entice issuers by emphasizing their relative market power and ability to set interchange and other fees. Id.; see also 76 Fed.Reg. at 43,396. Networks thus have an incentive to continuously raise merchants’ interchange fees — which, again, flow from merchants to issuers — as a way to attract issuers to the network. Visa, for instance, more than tripled the Interlink interchange fee since the early-1990s, forcing small competitor PIN networks to increase their fees as well. Mott, supra note 2, ¶¶ 23-24; Salop, supra note 1, ¶¶ 40, 46. Within each network, issuers all receive the same interchange fee, regardless of their efficiency in processing transactions or their efforts to prevent fraud. See Durbin Comments, supra note 5, at 5, 9. In addition, Visa’s and MasterCard’s “Honor All Cards” rules force merchants that accept their networks’ ubiquitous credit cards also to accept their signature debit cards with their corresponding high signature transactions fees. As a practical matter, then, merchants cannot put downward pressure on interchange fees by rejecting network-affiliated debit cards. Durbin Comments, supra note 5, at 2, 5. And issuers have implemented reward programs, special promotions, and penalty fees to encourage debit (especially signature-debit) usage. Mott, supra note 2, ¶¶ 16-18; Salop, supra note 1, ¶ 47. Merchants have responded by raising the price of goods and services to offset the fees. See Durbin Comments, supra note 5, at 5, 9; NRF Comments, supra note 8, at 5. The major card networks, not surprisingly, have also increased their own network fees, facilitated in part by exclusivity deals between the leading networks and debit issuers. Mott, supra note 2, ¶¶ 26-27; Salop, supra note 1, ¶¶ 30-31. Although there has been some network competition for PIN transactions, Visa and MasterCard have longstanding operating rules that disallow any other network from handling signature transactions on their cards. 76 Fed.Reg. at 43,396; Mott, supra note 2, ¶¶ 26-27; Salop, supra note 1, ¶¶ 30-31. Within the PIN market, too, Visa has agreements with particular issuers that create exclusivity via “volume commitments that are pegged to incentives such as reduced fees” or require that Interlink be their sole PIN debit network. Salop, supra note 1, ¶ 30. Thus, the dominant networks have been able to raise their network fees on merchants without concern for lost transaction volume because merchants have no other alternatives for routing transactions. Id. ¶ 31. According to information collected by the Board, total network fees exceeded $4.1 billion in 2009, with networks charging issuers and acquirers more than $2.3 billion and $1.8 billion, respectively. 76 Fed.Reg. at 43,397. III. The Durbin Amendment On July 21, 2010, Congress passed legislation to address the rise of debit card fees. Coined the “Durbin Amendment” after its sponsor, Illinois Senator Richard J. Durbin, the legislation seeks to implement Section 920 of the Electronic Fund Transfer Act (“EFTA”), 15 U.S.C. § 1693o-2, as enacted by Section 1075 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), Pub.L. No. 111-203, 124 Stat. 1376, 2068-2074 (2010). The Durbin Amendment imposes various standards and rules governing debit fees and transactions. See id.; 76 Fed.Reg. at 43,394. The regulations apply only to issuers with assets exceeding $10 billion. § 1693o-2(a)(6)(A). A. Interchange Fees The Durbin Amendment first addresses interchange transaction fees, which are defined as “any fee established, charged or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic debit transaction.” § 1693o-2(c)(8). It provides that the fee charged by the issuer “with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the issuer with respect to the transaction.” Id. § 1693o-2(a)(2) (emphasis added). It then directs the Board to establish standards to determine whether the amount of a debit card interchange fee is “reasonable and proportional to the cost incurred by the issuer” with respect to the transaction. Id. § 1693o-2(a)(3)(A). To promulgate these standards, Congress instructs the Board that it: shall— (A) consider the functional similarity between— (i) electronic debit transactions; and (ii) checking transactions that are required within the Federal Reserve bank system to clear at par; [and] (B) distinguish between— (i) the incremental cost incurred by an issuer for the role of the issuer in the authorization, clearance, or settlement of a particular electronic debit transaction, which cost shall be considered under [§ 1693o-2(a)(2) ]; and (ii) other costs incurred by an issuer which are not specific to a particular electronic debit transaction, which costs shall not be considered under [§ 1693o-2(a)(2) ] Id. § 1693o-2(a)(4)(A)-(B). Once the Board establishes this interchange transaction fee standard, Congress authorizes the Board to adjust the fee to allow for fraud-prevention costs, provided the issuer complies with standards established by the Board relating to fraud prevention: (5) Adjustment to interchange transaction fees for fraud prevention costs (A) Adjustments. The Board may allow for an adjustment to the fee amount received or charged by an issuer under [§ 1693o-2(a)(2) ], if— (i) such adjustment is reasonably necessary to make allowance for costs incurred by the issuer in preventing fraud in relation to electronic debit transactions involving that issuer; and (ii) the issuer complies with the fraud-related standards established by the Board under [§ 1693o-2(a)(5)(B) ], which standards shall— (I) be designed to ensure that any fraud-related adjustment of the issuer is limited to the amount described in clause (i) and takes into account any fraud-related reimbursements (including amounts from charge-backs) received from consumers, merchants, or payment card networks in relation to electronic debit transactions involving the issuer; and (II) require issuers to take effective steps to reduce the occurrence of, and costs from, fraud in relation to electronic debit transactions, including through the development and implementation of cost-effective fraud prevention technology. Id. § 1693o-2(a)(5)(A). B. Network Regulation The Durbin Amendment also instructs the Board to regulate network fees by prescribing rules related to network non-exclusivity for routing debit transactions. 76 Fed.Reg. at 43,394. Preferring a market-oriented approach to network fees, the Durbin Amendment provides that the Board may regulate such fees only as necessary to ensure that they are not used to “directly or indirectly compensate an issuer with respect to an electronic debit transaction” or “circumvent or evade the restrictions ... and regulations” prescribed by the Board under this subsection. § 1693o-2(a)(8)(B)(i)-(ii). At the same time, the Amendment requires the Board to adopt rules that prohibit issuers and networks from entering into exclusivity arrangements or imposing restrictions on the networks through which merchants may route a transaction. Specifically, Congress directs the Board to promulgate regulations providing that issuers and networks “shall not directly or through any agent ... restrict the number of payment card networks on which an electronic debit transaction may be processed” to one such network or two or more affiliated networks or “inhibit the ability of any person who accepts debit cards for payments to direct the routing of electronic debit transactions for processing over any payment card network that may process such transactions.” § 1693o-2(b)(l)(A)-(B). IV. The Board’s Rule After the enactment of the Dodd-Frank Act, the Board sought information from various industry participants to assist the agency in its initial rulemaking. The Board met with debit card issuers, payment card networks, merchant acquirers, consumer groups, and industry trade associations on a number of occasions to discuss a host of issues including debit transaction processing flows, transaction fee structures and levels, fraud-prevention activities, fraud losses, routing restrictions, card-issuing arrangements, and incentive programs. In September 2010, the Board circulated surveys to financial organizations with assets totaling $10 billion or more, networks that process debit card transactions, and the largest nine merchant acquirers in order to collect data on PIN, signature, and prepaid debit card operations and, for each card type, the costs associated with interchange and other network fees, fraud losses, fraud-prevention and data-security activities, network exclusivity arrangements, and debit-card routing restrictions. 75 Fed.Reg. at 81,724-25. In both the proposed and final rulemaking, the Board provided a detailed summary of the survey responses, see id. at 81,724-26; 76 Fed.Reg. at 43,397-98, and upon issuing the Final Rule, it released a full report including survey statistics. A. Proposed Rule On December 28, 2010, the Board issued a NPRM implementing the Durbin Amendment and requesting public comments. 75 Fed.Reg. at 81,722. Stemming from its determination to include “only those costs that are specifically mentioned for consideration in the statute,” the Board proposed that the interchange transaction fee standard be limited to the costs associated with the authorization, clearing, and settlement (“ACS”) of an electronic debit transaction that vary with the number of transactions sent to the issuer within the reporting period. Id. at 81,734-35, 81,739. The Board noted that, by focusing on the issuer’s variable, per-transaction ACS costs, it was carrying out Congress’s mandate to establish standards to assess whether an interchange fee is reasonable and proportional to the cost incurred by the issuer with respect to the transaction. Id. Consequently, in the NPRM, the Board suggested that network processing fees, as well as fixed and overhead costs common to all debit transactions and not attributable to the ACS of any one transaction, be excluded from recovery under the interchange transaction fee standard. Fraud losses and the costs of fraud-prevention and reward programs were also deemed unallowable because they are not attributable to the variable ACS costs incurred by an issuer. 75 Fed.Reg. at 81,755, 81,760. While merchants overwhelmingly supported the Board’s plan to limit allowable costs within the interchange transaction fee standard to only incremental ACS costs, networks and issuers advocated expanding the proposed set of allowable costs. 76 Fed.Reg. at 43,424-25. Indicating that its proposal was still subject to change, the Board “requested] comment on whether it should allow recovery through interchange fees of the other costs of a particular transaction beyond authorization, clearing, and settlement” and, if so, “on what other costs of a particular transaction, including network fees paid by issuers for the processing of transactions, should be considered allowable costs.” 75 Fed.Reg. at 81,735. Drawing on its comprehensive survey data relating to debit transaction fees, the Board proposed two alternative standards to govern interchange fees. The first, which the Board called “Alternative 1,” allowed each issuer to recover its actual incremental ACS costs up to a safe harbor of seven cents ($.07) per transaction if the issuer chose not to determine its individual allowable costs, and up to a cap of twelve cents ($.12) if it did. 75 Fed.Reg. at 81,-736-38. The second, “Alternative 2,” set a cap at a flat twelve cents ($.12) per transaction. Id. at 81,738. With respect to network non-exclusivity for routing debit transactions, the Board requested comment on two alternative methods for implementation. The first, called “Alternative A,” required at least two unaffiliated payment card networks active on each debit card, even if one network processed only signature transactions and one handled only PIN transactions. See 75 Fed.Reg. at 81,749. The second, “Alternative B” required at least two active unaffiliated payment card networks for each type of authorization method — ie., at least two to process PIN transactions and two to process signature. 75 Fed.Reg. at 81,749. In either case, issuers and networks could not inhibit a merchant’s ability to direct the routing of an electronic debit transaction over any available network. Id. at 81,751. More than 11,500 commenters — including several of the named plaintiffs, as well as various issuers, payment card networks, consumers, consumer advocates, trade associations and members of Congress — replied to the Board’s request for comment. 76 Fed.Reg. at 43,394. In drafting the Final Rule, the Board relied on the voluminous comments, the statutory provisions, the available cost data, its understanding of the debit payment system, and other relevant information. 76 Fed.Reg. at 43,394. B. Final Rule The Board’s Final Rule was published on July 20, 2011 and became effective on October 1, 2011. See id. As its standard for assessing whether the interchange fee for a debit transaction is reasonable and proportional to the issuer’s costs, the Board adopted “a modified version of proposed Alternative 2.” Id. at 43,404. It permits each issuer to receive a fee as high as twenty-one cents ($.21) per transaction plus an ad valorem amount of five basis points of the transaction’s value (0.05%). 12 C.F.R. § 235.3(b). The Board increased the allowable interchange fee (from twelve cents in Alternative 2 to twenty-one cents in the Final Rule) after concluding that the language and purpose of the Durbin Amendment allow the Board to consider additional costs not explicitly excluded from consideration by the statute. Id. at 43,426-27. According to the Board, § 1693o-2(a)(4)(B) on the one hand requires the Board to consider incremental ACS costs incurred by issuers, and on the other hand prohibits consideration of any issuer costs that are not specific to a particular transaction; but it is silent with respect to costs that fall into neither category (e.g., costs specific to a particular transaction but are not incremental ACS costs). Id. at 43,426. The Board concluded that it had discretion to consider costs on which the statute is silent. Id. In setting the final interchange transaction fee standard, the Board considered all costs for which it had data, other than those prohibited under subsection (a)(4)(B). Id. Based on survey data and public comments, the Board found that issuers incur transaction costs other than the variable ACS costs that the Board originally proposed as the only allowable costs in the interchange fee, and that “no electronic debit transaction can occur without incurring these [non-variable ACS] costs, making them ... specific to each and every electronic debit transaction” under the statute. Id. at 43,427; see also id. at 43,404. Consequently, the Board amended its final interchange transaction fee standard to include, in addition to variable ACS costs: (1) fixed costs related to processing a particular transaction, such as network connectivity and software, hardware, equipment, and labor; (2) transaction monitoring costs; (3) an allowance for fraud losses (the ad valorem component); and (4) network processing fees. Id. at 43,404, 43,429-31. As to the network non-exclusivity rule, the Board concluded that “[t]he plain language of the statute does not require that there be two unaffiliated payment card networks available to the merchant for each method of authentication.” Id. at 43,447; see also id. (“[T]he statute does not expressly require issuers to offer multiple unaffiliated signature and multiple unaffiliated PIN debit card network choices on each card.” (emphasis added)). Hence, the Board adopted Alternative A, which requires only that two unaffiliated networks be available for each debit card, not for each authorization method. 12 C.F.R. § 235.7(a)(2) & Official Cmt. 1; 76 Fed.Reg. at 43,404. On the same day that the Board adopted its Final Rule on debit card interchange fees and network non-exclusivity, it also published a separate Interim Final Rule on a proposed adjustment to the interchange fee for fraud-prevention costs under 15 U.S.C. § 1693o-2(a)(5). See 76 Fed.Reg. at 43,478. The Board has since finished that rulemaking, and on August 2, 2012 it adopted a final rale governing the fraud-prevention cost adjustment. See 77 Fed.Reg. 46,258; 12 C.F.R. § 235.4. V. This Litigation On November 22, 2011, plaintiffs sued the Board, seeking a declaratory judgment that the Final Rule’s interchange fee and network non-exclusivity provisions (12 C.F.R. §§ 235.3(b) and 235.7(a)(2)) are arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the law. See generally Compl. [Dkt. # 1]. Moreover, plaintiffs seek costs and reasonable attorneys’ fees pursuant to 28 U.S.C. § 2412, and such other relief as the Court deems reasonable and proper. See generally Am. Compl. Plaintiffs amended their complaint on March 2, 2012. Id. As individual retailers that accept debit cards and trade associations comprised of merchants, see supra p. 87, plaintiffs contend that the Final Rule is an unreasonable interpretation of the Durbin Amendment because it ignores Congress’s directives regarding interchange fees and network exclusivity. See Am. Compl. ¶¶ 5, 11. As to the former, plaintiffs assert that the Durbin Amendment limits the Board’s consideration of allowable costs to the “incremental cost” of “authorization, clearance and settlement of a particular electronic debit transaction,” and that, by including other costs in the fee standard, the Board “acted unreasonably and in excess of its statutory authority.” Id. ¶¶ 6, 70-73, 82-83. Regarding the latter, plaintiffs argue that the Board disregarded the plain meaning of the Durbin Amendment and misconstrued the statute by adopting a network non-exclusivity rule requiring all debit cards be interoperable with at least two unaffiliated payment networks, rather than requiring that all debit transactions be able to run over at least two unaffiliated networks. Id. ¶¶ 9-10, 91-93. Plaintiffs moved for summary judgment on March 2, 2012, arguing that the Final Rule’s interchange transaction fee and network non-exclusivity regulations should be declared invalid under the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2), because the Board impermissibly implemented the Durbin Amendment’s statutory command and thus exceeded its authority. Pis.’ Mot. for Summ. J. (“Pls.’s Mot.”) at 1 [Dkt. # 20]; Pis.’ Mem. in Supp. of Pis.’ Mot. for Summ. J. (“Pis.’ Mem.”) at 2 [Dkt. # 20]. The Court permitted amicus curiae briefs to be filed by three different parties: (1) a consortium of major nationwide bank and credit union trade associations in the United States; (2) Senator Richard J. Durbin, a member of Congress and the primary author of the Durbin Amendment; and (3) a group of convenience stores, quick-service restaurants and specialty coffee shops that operate small business franchises and licensed stores. The latter two groups of amici filed briefs in support of plaintiffs’ motion for summary judgment; the bank and credit union amici supported neither party. On April 13, 2012, the Board filed a cross-motion for summary judgment, contending that' plaintiffs’ claims lack merit and that the Board is entitled to judgment as a matter of law. Def.’s Cross-Mot. for Summ. J. (“Def.’s Cross-Mot.”) at 1 [Dkt. # 23]; Def.’s Mem. in Supp. of Def.’s Mot. for Summ. J. and in Opp’n to Pis.’ Mot. for Summ. J. (“Def.’s Mem.”) at 1-2 [Dkt. #23]. On October 2, 2012, I heard oral argument from the parties as well as the bank and credit union amici. See Civ. Case No. 11-2075, Minute Entry, Oct. 2, 2012. For the reasons set forth below, I agree with the plaintiffs and GRANT summary judgment in their favor. STANDARD OF REVIEW I. Summary Judgment Summary judgment is appropriate when the record evidence demonstrates that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden is on the moving party to demonstrate an “absence of a genuine issue of material fact” in dispute. Celotex, 477 U.S. at 323, 106 S. Ct. 2548. In a case involving judicial review of final agency action under the APA, however, “the Court’s role is limited to reviewing the administrative record.” Air Transp. Ass’n of Am. v. Nat’l Mediation Bd., 719 F.Supp.2d 26, 32 (D.D.C. 2010) (citations omitted). “[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to made the decision it did.” Select Specialty Hosp.-Bloomington, Inc. v. Sebelius, 893 F.Supp.2d 1, 4 (D.D.C.2012) (citations and internal quotation marks omitted). II. Administrative Procedure Act Under the APA, the Court must set aside agency action that exceeds the agency’s “statutory jurisdiction, authority, or limitations.” 5 U.S.C. § 706(2)(C). To determine whether an agency has acted outside its authority, I must apply the two-step framework under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Ass’n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 441 (D.C.Cir.2012). A Chevron analysis first requires the reviewing court to determine “whether Congress has directly spoken to the precise question at issue.” Chevron, 467 U.S. at 842, 104 S.Ct. 2778. To resolve whether “the intent of Congress is clear” under this first step, id., the court must exhaust the “traditional tools of statutory construction,” including textual analysis, structural analysis, and (when appropriate) legislative history, id. at 843 n. 9, 104 S.Ct. 2778; Bell Atl. Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C.Cir.1997). “If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842-43,104 S.Ct. 2778. If after employing these tools, however, the Court concludes that the statute is silent or ambiguous on the specific issue, the Court moves on to step two and defers to any agency interpretation that is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778. An agency’s construction is permissible “unless it is arbitrary or capricious in substance, or manifestly contrary to the statute.” Mayo Found, for Med. Educ. & Research v. United States, — U.S. -, 131 S.Ct. 704, 711, 178 L.Ed.2d 588 (2011) (citations and internal quotation marks omitted). “[T]he whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency.” Ass’n of Private Sector Colls., 681 F.3d at 441 (citations and internal quotation marks omitted). ANALYSIS I. Plaintiffs Have Met Their Burden of Production for Article III Standing. Curiously, the Board contends in a footnote that plaintiffs have failed to establish Article III standing because they failed in their opening brief to provide affidavits or other evidence that set forth specific facts demonstrating standing. See Def.’s Mem. at 13 n. 7 (citing Sierra Club v. EPA, 292 F.3d 895, 899 (D.C.Cir.2002)). But reading on, the Sierra Club court explicitly recognized that: In many if not most cases the petitioner’s standing to seek review of administrative action is self-evident; no evidence outside the administrative record is necessary for the court to be sure of it. In particular, if the complainant is an object of the action (or forgone action) at issue — as is the case usually in review of a rulemaking ... — there should be little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress it. 292 F.3d at 899-900 (citation and internal quotation marks omitted). Indeed, our Court of Appeals has expressly rejected the use of the Sierra Club rule as a procedural “gotcha” in cases where standing was reasonably thought to be self-evident. See Am. Library Ass’n v. FCC, 401 F.3d 489, 493-95 (D.C.Cir.2005); see also Fund for Animals, Inc. v. Norton, 322 F.3d 728, 733 (D.C.Cir.2003) (“Sierra Club, however, does not require parties to file evidentiary submissions in support of standing in every case. To the contrary, our decision made clear that ‘[i]n many if not most cases the petitioner’s standing to seek review of administrative action is self-evident.’ ”). For instance, in American Library Association, our Circuit Court explained that interpreting Sierra Club as requiring long jurisdictional statements in opening briefs was inconsistent with precedent, a waste of judicial resources, and an unnecessary burden on litigants. 401 F.3d at 494. Indeed, the court went on to clarify that Sierra Club need only “remind[ ] petitioners challenging administrative actions that, when they have good reason to know that their standing is not self-evident, they should explain the basis for their standing at the earliest appropriate stage in the litigation.” Id. at 493. Here, plaintiffs had every reason to believe that their standing was self-evident and no cause to suspect that standing would be challenged in this court at all, much less in a footnote on summary judgment! Moreover, the administrative record contains countless examples of how plaintiffs are injured by the Board’s interchange transaction fee and network non-exclusivity regulations. Cf. Am. Chemistry Council v. Dep’t of Transp., 468 F.3d 810, 822, 824 (D.C.Cir.2006) (standing can be “self-evident” from the administrative record). The Board’s own rulemaking recognizes that it is merchants that pay interchange and network fees and are thus directly affected by the Board’s Final Rule regulating both. See Fund for Animals, 322 F.3d at 734 (“[F]or the purpose of determining whether standing is self-evident, we see no meaningful distinction between a regulation that directly regulates a party and one that directly regulates the disposition of a party’s property.”). Accordingly, it was reasonable for each plaintiff to assume that it (or in the case of the trade associations, one of its members) would suffer an Article III injury when the Board’s Final Rule was implemented. And in their reply brief, plaintiffs submitted declarations demonstrating what was already self-evident: that they will suffer cognizable harms as a result of the Board’s regulations. See Pis.’ Reply at 7-9; cf. Cmtys. Against Runway Expansion, Inc. v. FAA 355 F.3d 678, 684-85 (D.C.Cir. 2004) (affidavits submitted with reply brief are sufficient under Sierra Club because they made associational standing “patently obvious” and respondent was not prejudiced). In short, plaintiffs have easily met their burden of production with regard to Article III standing here, and this Court will thus proceed to the merits. II. The Interchange Transaction Fee Regulation Is Invalid Under the APA. Plaintiffs contend that the Final Rule’s interchange transaction fee standard, 12 C.F.R. § 235.3(b), is plainly foreclosed by the text, structure, and purpose of the Durbin Amendment and is arbitrary, capricious, and contrary to law. According to plaintiffs, the plain language and legislative history of the statute make clear which issuer costs may be included in the interchange transaction fee standard, and the Board’s inclusion of other costs cannot survive scrutiny under Chevron’s first step. The Board, meanwhile, takes the position that the Durbin Amendment is silent, and therefore ambiguous, with respect to issuer costs not explicitly addressed in the statute. And because the final interchange fee provision is a reasonable construction of the statute, says the Board, it is entitled to Chevron deference. For the following reasons, I agree with the plaintiffs. A. The Durbin Amendment Plainly Limits the Costs Allowable Within the Interchange Transaction Fee Standard to Those Identified in 15 U.S.C. § 1693o-2(a)(4)(B)(i). Determining whether Congress has spoken to the precise question at issue through “the [statutory] language itself, the specific context in which that language is used, and the broader context of the statute as a whole” is, of course, this Court’s first task. Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). Our Court of Appeals has directed this Court to use “all traditional tools of statutory interpretation, including text, structure, purpose, and legislative history, to ascertain Congress’s intent at Chevron step one.” Nat’l Cable & Telecomms., Ass’n v. FCC, 567 F.3d 659, 663 (D.C.Cir.2009) (citation and internal quotation marks omitted). If this examination yields a clear result, “then Congress has expressed its intention as to the question, and deference is not appropriate.” Natural Res., Def. Council, Inc. v. Daley, 209 F.3d 747, 752 (D.C.Cir.2000). To discern the text’s plain meaning, the Court is to look to “the language of the statute itself.” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, — U.S. --, 132 S.Ct. 1670, 1680, 182 L.Ed.2d 678 (2012) (citation omitted). “[W]hen the statute’s language is plain, the sole function of the courts — at least where the disposition required by the text is not absurd — is to enforce it according to its terms.” Hartford Underwriters Ins., Co. v. Union Planters Bank, 530 U.S. 1, 6, 120 S.Ct. 1942, 147 L.Ed.2d 1 (2000) (citation and internal quotation marks omitted). “Unless otherwise defined, statutory terms are generally interpreted in accordance with their ordinary meaning.” BP Am. Prod. Co. v. Burton, 549 U.S. 84, 91, 127 S.Ct. 638, 166 L.Ed.2d 494 (2006); see also FCC v. AT & T Inc., — U.S.-, 131 S.Ct. 1177, 1182, 179 L.Ed.2d 132 (2011). An analysis of the statutory text, however “does not end here, but must continue to ‘the language and design of the statute as a whole.’ ” Am. Scholastic TV Programming Found, v. FCC, 46 F.3d 1173, 1178 (D.C.Cir.1995) (quoting Fort Stewart Sch. v. FLRA, 495 U.S. 641, 645, 110 S.Ct. 2043, 109 L.Ed.2d 659 (1990)). The Court must also “exhaust the traditional tools of statutory construction, including examining the statute’s legislative history to shed new light on congressional intent, notwithstanding statutory language that appears superficially clear.” Sierra Club v. EPA, 551 F.3d 1019, 1027 (D.C.Cir.2008) (citations omitted); see also AFL-CIO v. FEC, 333 F.3d 168, 172 (D.C.Cir.2003) (“We consider the provisions at issue in context, using traditional tools of statutory construction and legislative history.”), i. Subsection (a)(4)(B) Bifurcates the Universe of Electronic Debit Transaction Costs into the Allowable and the Impermissible. The Durbin Amendment instructs the Board to ensure that any interchange fee charged by an issuer “is reasonable and proportional to the cost incurred by the issuer with respect to the transaction,” § 1693o-2(a)(3), and in so doing it must “distinguish between” two categories of costs. Id. § 1693o-2(a)(4)(B)(i)-(ii). Plaintiffs contend that these categories bifurcate the entire universe of costs into two, and only two, groups: (1) costs that are “incremental” or variable, incurred by an issuer for its role in the “authorization, clearance, or settlement,” and that relate to a “particular” or single electronic debit transaction, which “shall be considered,” § 1693o-2(a)(4)(B)(i) (emphasis added); and (2) “other costs” “incurred by an issuer which are not specific to a particular electronic debit transaction,” which “shall not be considered,” § 1693o-2(a)(4)(B)(ii) (emphasis added). The Board disagrees, arguing that subsection (a)(4)(B) is silent when it comes to costs that are specific to a particular electronic debit transaction but that are not incremental ACS costs, as those costs do not fit into either subsection (a)(4)(B)(i) or (a)(4)(B)(ii). According to the Board, this creates ambiguity that the Board has the discretion to resolve. How convenient. Starting with subsection (a)(4)(B)’s text, I have no difficulty concluding that the statutory language evidences an intent by Congress to bifurcate the entire universe of costs associated with interchange fees. Indeed, Congress directed the Board to “distinguish between” — or, according to its plain and ordinary meaning, “separate into different categories” or “make a distinction” — between: (1) incremental ACS costs relating to a particular transaction, which “shall be considered” in establishing the interchange transaction fee standard, and (2) “other costs” which are not specific to a particular transaction, which the Board “shall not” consider. § 1693o-2(a)(4)(B)(i) — (ii) (emphases added). By using strategically placed “shall” and “shall not” terms — which plainly indicate the inclusion of the first category of costs and exclusion of the second — Congress expressed its clear intent to separate costs that must be included in the interchange transaction fee standard and “other costs” that must be excluded. See Ass’n of Civilian Technicians, Mont. Air Chapter No. 29 v. Fed. Labor Relations Auth., 22 F.3d 1150, 1153 (D.C.Cir.1994) (“The word ‘shall’ generally indicates a command that admits of no discretion on the part of the person instructed to carry out the directive.”). Furthermore, Congress used the inclusive phrase “other costs,” as opposed to just “costs,” to refer to those costs not to be considered in the interchange transaction fee standard. The plain import of Congress’s word choice, according to the ordinary definition of “other” and relevant case law, is that this second, prohibited category of “other costs” was intended to subsume all costs not explicitly addressed in the first, permissible category of costs. See Merriam-Webster’s Collegiate Dictionary 878-79 (11th ed.2009) (defining “other” as “being the one (as of two or more) remaining or not included; being the one or ones distinct from that or those first mentioned or implied”). In other words, the plain text makes clear that the incremental ACS cost of a particular electronic debit transaction is the only cost the Board was expressly authorized to consider in its interchange transaction fee standard. The Board’s counterargument — that Congress directed it not to consider “other costs incurred by an issuer which are not specific to a particular electronic debit transaction,” § 1693o — 2(a) (4)(B) (ii) (emphasis added), meaning that only costs “not specific to a particular ... transaction” are barred from consideration — is wholly unpersuasive. See Def.’s Mem. at 20-21. The non-restrictive pronoun “which” is a descriptor, rather than a qualifier, and Congress has repeatedly utilized this term to further describe the preceding phrase — here, “other costs” — rather than to condition or limit it. See United States v. Indoor Cultivation Equip, from High Tech Indoor Garden Supply, 55 F.3d 1311, 1315 (7th Cir.1995) (concluding that Congress’s use of the pronoun “which,” as in “[a]ll conveyances, including aircraft, vehicles, or vessels, which are used to ... facilitate [drug transactions],” did not limit the meaning of the word it amended, “conveyance,” to a vehicle or vessel used or intended to be used to facilitate a drug transaction). Not surprisingly, the Board fails to cite any persuasive definition or case law to the contrary, and its focus on commas is a red herring. See, e.g., Barrett v. Van Pelt, 268 U.S. 85, 91, 45 S.Ct. 437, 69 L.Ed. 857 (1925) (“Punctuation is a minor, and not a controlling, element in interpretation, and courts will disregard the punctuation of a statute, or re-punctuate it, if need be, to give effect to what otherwise appears to be its purpose and true meaning.” (citation omitted)). Finally, statements by Senator Richard J. Durbin, the Amendment’s chief sponsor, confirm that Congress intended to bifurcate the universe of costs into incremental ACS costs includable in the interchange transaction fee standard and all other costs to be excluded. Specifically, in addressing the meaning of the Amendment on the floor of the Senate prior to its final passage, Senator Durbin stated: Paragraph (a)(4) [of the Amendment] makes clear that the cost to be considered by the Board in conducting its reasonable and proportional analysis is the incremental cost incurred by the issuer for its role in the authorization, clearance, or settlement of a particular electronic debit transaction, as opposed to other costs incurred by an issuer which are not specific to the authorization, clearance, or settlement of a particular electronic debit transaction. 156 Cong. Rec. S5,925 (daily ed. July 15, 2010) (emphasis added). Although the Board admits that Senator Durbin’s statement appears to divide the universe of costs into two categories, it argues nonetheless that the actual language of the statute overrides any floor statement by the bill’s sponsor. See Def.’s Mem. at 20. Chevron, however, contemplates that legislative history' — including history that does not match the text of the statute verbatim — will be read along with the statute to determine Congress’s intent. See Chevron, 467 U.S. at 851-53, 862-64, 104 S.Ct. 2778; Aid Ass’n for Lutherans v. U.S. Postal Sen., 321 F.3d 1166, 1176-78 (D.C.Cir.2003) (using legislative history, in tandem with plain language of statute, in Chevron step one). In this case, Senator Durbin’s statement, read in conjunction with the statute’s text, confirms that Congress intended to divide all costs into two categories: those that can and those that cannot be considered in setting the interchange fee standard. ii. Congress Intended to Exclude All Costs Other than the Incremental ACS Costs Incurred by the Issuer for a Particular Debit Transaction from the Interchange Fee Standard. Further parsing of the statute confirms that Congress intended to narrow the scope of costs considered in the interchange transaction fee standard. Subsection (a)(4)(B)® directs the Board to include in the standard those ACS costs that are “incremental [to the] cost incurred by an issuer for the role of the issuer in ... a particular electronic debit transaction.” § 1693o-2(a)(4)(B)(i) (emphasis added). The term “incremental” limits the includable costs to “variable, as opposed to fixed,” ACS costs. Me. Pub. Serv. Co. v. FERC, 964 F.2d 5, 9 (D.C.Cir.1992). And the subsection includes only those costs incurred for the issuer’s role in processing the transaction. § 1693o — 2(a)(4)(B)(i). In addition, subsection (a)(4)(B)(ii) instructs the Board to exclude from the standard any “other costs incurred by an issuer which are not specific to a particular ... transaction.” § 1693o-2(a)(4)(B)(ii) (emphases added). Congress thus directed the Board to omit “other costs incurred by an issuer which are not [unique] to a [distinct or individual] transaction.” The plain text of the Durbin Amendment thus precludes the Board from considering in the interchange fee standard any costs, other than variable ACS costs incurred by the issuer in processing each debit transaction. The Board contends that the statute’s failure to define the terms “incremental cost” or “authorization, clearance, or settlement,” or to delineate which types of costs are “not specific to a particular electronic debit transaction,” renders those terms ambiguous, thereby giving the Board the authority to fill those statutory gaps. See Def.’s Mem. at 26-27. Not quite! If I were to accept the Board’s argument, then every term in the statute would have to be specifically defined or otherwise be deemed ambiguous. This result makes no sense, and more importantly, it is not the law. When a term is not defined in a statute, a court must assume that “the legislative purpose is expressed by the ordinary meaning of the words used.” AT & T, 131 S.Ct. at 1182; United States v. Locke, 471 U.S. 84, 95, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985) (distinguishing “filling a gap left by Congress’ silence” from “rewriting rules that Congress has affirmatively and specifically enacted”) (citation omitted). “[T]he meaning of statutory language, plain or not, depends on context,” King v. St Vincent’s Hosp., 502 U.S. 215, 221, 112 S.Ct. 570, 116 L.Ed.2d 578 (1991), and the relevant provisions, statutory design, and legislative history here clearly support my reading of the statute. First, the statute’s information collection provision explicitly requires public disclosure only of information “concerning the costs incurred, and interchange transaction fees charged or received ... in connection with the authorization, clearance or settlement of electronic debit transactions.” § 1693o-2(a)(3)(B) (emphasis added). That disclosure is limited to the same costs specified in subsection (a)(4)(B)(i) reinforces that those ACS costs are the only ones Congress intended to include in the interchange transaction fee standard. Subsection (a)(4)(A) of the statute also directs the Board to consider the “functional similarity” between “electronic debit transactions” and “checking transactions that are required within the Federal Reserve bank system to clear at par ” when prescribing standards used to assess whether an interchange transaction fee is reasonable and proportional to the issuer’s transactions. § 1693o-2(a)(4)(A) (emphasis added). The Board is thus required to consider how debit and checking transactions are “like” or “[r]esembling though not completely identical” in terms of their “capability] of performing” or “ability] to perform a regular function.” Congress understood that debit card transactions are “akin to writing a check” because “[a]ll that happens ... is you deduct money from your bank account.” See 156 Cong. Rec. S3,696 (daily ed. May 13, 2010) (statement of Sen. Richard J. Durbin) (“That is why debit cards are advertised as check cards.”). However, as Senator Durbin explained, “there are zero transaction fees deducted when you use a check,” unlike interchange fees, which “are deducted from every [debit] transaction left for the seller.” Id. The Board even proposed in its NPRM to limit “allowable costs ... to those that the statute specifically allows to be considered, and not be expanded to include additional costs that a payor’s bank in a check transaction would not recoup through fees from the payee’s bank.” 75 Fed.Reg. at 81,735 (emphasis added). The Board argues that the plain language of subsection (a)(4)(A) merely requires the Board to consider the functional similarity between electronic debit transactions and checking transactions in determining its interchange fee standard (which it did) and does not preclude the Board’s consideration of differences. “Were courts to presume a delegation of power absent an express withholding of such power,” however, “agencies would enjoy virtually limitless hegemony, a result plainly out of keeping with Chevron [.]” Ry. Labor Execs. Ass’n v. Nat’l Mediation Bd., 29 F.3d 655, 671 (D.C.Cir.1994); see also Am. Bar Ass’n v. FTC, 430 F.3d 457, 468 (D.C.Cir. 2005) (“[I]f there is the sort of ambiguity that supports an implicit congressional delegation of authority to the agency to make a deference-worthy interpretation of the statute, we must look elsewhere than the [statute’s] failure to negate[.]”). In fact, it defies common sense to read an explicit directive to consider “functional similarity” as authorization to consider differences, as well Lastly, subsection (a)(5)(A)(i) directs the Board “to make allowance for costs incurred by the issuer in preventing fraud” via an “adjustment to the fee amount received or charged by an issuer” under the interchange fee standard. § 1693o-2(a)(5)(A)(i) (emphasis added). At first glance, Congress’s choice of words here appears to sanction a wholesale inclusion of fraud-prevention costs within the interchange transaction fee standard. However, subsection (a)(5)(A)(i) limits “any fraud-related adjustment” to the amount “reasonably necessary ... to prevent[ ] fraud in relation to electronic debit transactions involving that issuer,” and (a)(5)(A)(ii) conditions that adjustment on an issuer’s compliance with fraud-related standards that “require issuers to take effective steps to reduce the occurrences and costs of, and costs from, fraud in relation to electronic debit transactions.” § 1693o-2(a)(5)(A)(i)-(ii). Senator Durbin’s discussion of subsection (a)(5) sheds further light on this provision: It should be noted that any fraud prevention adjustment to the fee amount would occur after the base calculation of the reasonable and proportional interchange fee amount takes place, and fraud prevention costs would not be considered as part of the incremental issuer costs upon which the reasonable and proportional fee amount is based. Further, any fraud prevention cost adjustment would be made on an issuer-specific basis, as each issuer must individually demonstrate that it complies with the standards established by the Board, and as the adjustment would be limited to what is reasonably necessary to make allowance for fraud prevention costs incurred by that particular issuer. 156 Cong Rec. S5,925 (daily ed. July 15, 2010) (statement of Sen. Richard J. Durbin) (emphases added); see also Durbin Comments, supra note 5, at 9. Accordingly, I find that the text and structure of the Durbin Amendment, as reinforced by its legislative history, are clear with regard to what costs the Board may consider in setting the interchange fee standard: Incremental ACS costs of individual transactions incurred by issuers may be considered. That’s it! B. The Board’s Interchange Fee Regulation Accounts for Costs That Are Unambiguously Foreclosed from Consideration by Congress. The Durbin Amendment is explicit about what costs the Board could consider in setting the interchange transaction fee, and the Board was required “to give effect to the unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. As the “final authority on issues of statutory construction,” federal courts are charged with “rejecting] administrative constructions which are contrary to clear congressional intent.” Id. at 843 n. 9, 104 S.Ct. 2778. For the following reasons, I reject the Board’s construction of the Durbin Amendment as non-compliant with Congress’s clear mandate. First, the Board’s understanding that a third category of costs can be recovered under the interchange transaction fee standard is irreconcilable with the statute. In its Final Rule, the Board concluded that it could, in its discretion, factor into the interchange fee any costs “that are specific to a particular electronic debit transaction but that are not incremental costs related to the issuer’s role in authorization, clearance, and settlement.” 76 Fed.Reg. at 43,426. According to the Board, the statute is silent as to costs not addressed in § 1693o-2(a)(4)(B)(i) or (ii), and Congress did “not restrict the factors the Board may consider in establishing standards for assessing whether interchange transaction fees are reasonable and proportional to cost.” 76 Fed.Reg. at 43,424. In exercising this purported discretion, the Board reads the statutory language prohibiting it from considering costs “not specific to a particular electronic debit transaction,” § 1693o-2(a)(4)(B)(ii), as prohibiting it from considering only “those costs that are not incurred in the course of effecting any electronic debit transaction,” 76 Fed.Reg. at 43,426 (emphasis added). The Board, to its credit, still did not consider costs associated with corporate overhead (e.g., executive compensation), establishing and maintaining an account relationship, debit card production and delivery, marketing, research and development, insufficient funds handling, network membership fees, reward programs, and customer support, id. at 43,427-29. But the Board did, contrary to the expressed will of Congress, consider “any cost that is not prohibited — i.e., any cost that is incurred in the course of effecting an electronic debit transaction,” id. at 43,426, including fixed costs (ie., network connectivity and software, hardware, equipment, and associated labor), network processing fees, transaction monitoring, and fraud losses, id. at 43,429-31. As a result, the final regulation sets a maximum fee that an issuer could recover at twenty-one cents ($.21) per transaction, plus an ad valorem amount of .05% of each transaction’s value, 12 C.F.R. § 235.3(b); 76 Fed.Reg. at 43,422 — well above the NPRM’s seven($.07) and twelve-cent ($.12) proposals, 75 Fed.Reg. at 81,736-38. This interpretation runs completely afoul of the text, design and purpose of the Durbin Amendment. By improperly narrowing the scope of excluded costs in subsection (a)(4)(B)(ii) to only those costs “not incurred in the course of effecting any electronic debit transaction,” the Board expanded the range of allowable costs in subsection (a)(4)(B)© to “any cost that is incurred in the course of effecting an electronic debit transaction.” 76 Fed.Reg. at 43,326. In so doing, the Board not only ignored critical statutory terms such as “distinguish between,” “other,” “specific,” “particular,” “incremental,” and “authorization, clearance, or settlement” — which provide clear guidance,