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The Supreme Court this week said a New York law that effectively prohibits merchants from charging customers surcharges when paying by credit card does regulate speech. Merchants are arguing that the law and others like it violate their First Amendment free-speech rights.

The Supreme Court sent the case, Expressions Hair Design v. Schneiderman, back to the 2nd Circuit Court of Appeals to decide whether that regulation is unconstitutional.

The New York law in question is similar to laws in nine other states. It says merchants cannot disclose to customers that they're being assessed a surcharge at check-out for using their credit card – a transaction that requires the merchant to pay for interchange. However, merchants are allowed to give discounts to those consumers paying with cash.

A U.S. district court sided with merchants in 2013, but an appeals court in the second circuit upheld the law in September 2015.

NAFCU will continue to monitor this case for its potential impact on credit unions.