The US National Retail Federation on Thursday praised a federal judge’s ruling overturning the Federal Reserve’s 2011 cap on debit card “swipe” fees in response to a merchant’s lawsuit that said the Fed set the cap too high.
“As merchants have argued for 14 years, the Fed’s broad attempt to allow big banks to essentially charge rent-seeking fees for debit card transactions is illegal,” NRF chief administrative officer and general counsel Stephanie Martz said. “That question is now settled.
If the Durbin Amendment is to mean anything, it’s that there are specific costs that banks can recover from merchants, and costs that they categorically cannot recover from merchants. This court was correct in discerning this distinction. And the court was correct in requiring the Fed to set rates based on individual transactions, not a blended average. We fully expect this decision to be sustained on appeal, and to save merchants hundreds of millions of dollars.”
U.S. District Judge Daniel Traynor on Wednesday granted summary judgment in a 2021 federal lawsuit filed by Corner Post, a Watford City, N.D., truck stop and convenience store. Traynor vacated the Fed’s cap on debit card swipe fees but said that part of the order would be placed on hold pending any appeal “in order to prevent interchange transactions from becoming a completely unregulated market.”
Traynor said his order does not prevent the Fed’s proposed reduction in the cap, which has been pending since 2023, from taking effect if the Fed moves forward with the reduction.
Full story NRF applauds court ruling overturning debit card swipe fee cap as too high
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