A judge overturned a Federal Reserve rule capping debit card fees that banks collect from merchants
August 1, 2013
A U.S. district court on Wednesday overturned a Federal Reserve rule capping the debit card fees that banks collect from merchants.
The judge ruled that the Federal Reserve improperly set the caps too high after an extensive lobbying campaign by the banking industry. Under the rule, banks can charge retailers as much as 21 cents a transaction.
The court ruling was a victory for the many retailers that had complained that the cap on the interchange fee, or “swipe fee,” is too high. Retailers have argued that consumers will benefit from a lower fee because these costs are sometimes passed on in the form of higher prices.