NY Court agrees with major banks on definition of “foreign currency retail transactions”

Maria Nikolova

Judge Lorna G. Schofield agreed with defendant banks that the definition includes only transactions involving foreign currency purchased with USD and physically received at the banks’ retail branches within the US.

Judge Lorna G. Schofield of the New York Southern District Court has once again sided with a number of major banks over the definition of “foreign currency retail transactions”. On Thursday, September 6th, the Judge issued an order denying the plaintiffs’ motion for reconsideration of the Court’s earlier decision which supported the banks’ stance on what the definition of “foreign currency retail transactions” covers.

Let’s recall that this is a Forex benchmark rate fixing case targeting top banks like JPMorgan Chase & Co. (NYSE:JPM), JPMorgan Chase Bank, N.A., Barclays Capital, Inc., Citibank, N.A., Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Bank of America, N.A, HSBC Bank USA, N.A., and HSBC North America Holdings, Inc.

The plaintiffs in the lawsuit – including Go Everywhere, Inc., Valarie Jolly, Mad Travel, Inc., Lisa McCarthy, John Nypl, and William Rubinsohn, had to explain the basis for their position that the term “foreign currency retail transactions” in this case should include transactions other than those involving foreign currency purchased with USD and physically received at the defendant banks’ retail branches within the United States, including credit and debit card transactions and ATM cash withdrawals abroad.

In explaining her decision that denied the plaintiffs’ motion for reconsideration, Judge Lorna G. Schofield noted that the plaintiffs fail to identify an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice. The latter factors are crucial for granting a motion for reconsideration.

Furthermore, according to Judge Schofield, the plaintiffs seek reconsideration of the Court’s earlier decision to reject plaintiffs’ interpretation of the term “foreign currency retail transactions” by restating and expanding on arguments made in their initial motion, which the Court already rejected. The plaintiffs principally reargue their contention that references to the word “purchase” in the third amended complaint include credit, debit and ATM card transactions. The Court rejected this argument, adopting the reasons stated in the defendant banks’ opposition.

The Judge notes that the plaintiffs also reargue their contentions that (1) exchange rates charged to Plaintiffs for credit, debit and ATM card transactions were based on wholesale benchmark rates; (2) Plaintiffs’ expert found a correlation between benchmark rates and rates used by Visa and MasterCard; and (3) Defendants advertised that wire transfers and credit, debit and ATM cards could be used abroad. But these arguments were rejected because none of them is relevant to the interpretation of the allegations of the third amended complaint, which include only the purchase of currency at retail branches in the United States.

The plaintiffs also tried to introduce new material, a “Federal Reserve Payments Study 2016,” to support their motion for reconsideration. This study, however, does not provide a basis for reconsideration, the Judge says, as it has nothing to do with the third amended complaint or foreign exchange transactions, and merely identifies “trends in noncash payments in the United States.”

The case is captioned Nypl v. JP Morgan Chase & Co. et al (1:15-cv-09300).

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