Retail Groups Suing Fed Over Debit Card Swipe Fees
The National Retail Federation, the Food Marketing Institute, the National Association of Convenience Stores and other retailers are suing the Federal Reserve for failing to set "reasonable" and "proportional" debit card swipe fees as it was required to do by last year's financial reform law, claiming that merchants and customers are being punished with higher costs as a result. The complaint was filed yesterday in the U.S. District Court in Washington.
The plaintiffs allege that the Fed bowed to bank lobbyists when it set the fees, which kicked in on Oct. 1, at about 22 cents instead of the originally proposed 12 cents. Before 2010's Dodd-Frank law, unregulated fees averaged about 44 cents.
"The Federal Reserve was required by law to come up with swipe fees that were 'reasonable' and 'proportional' but what we got were neither," NRF general counsel Mallory Duncan said in a statement. "Instead, the Fed allowed themselves to be influenced by the very banks they are supposed to regulate and raised the originally proposed cap to include expenses the law said were not allowed."
But American Bankers Association CEO Frank Keating told the Associated Press that the retail groups were "seeking more profits from government price controls" and that they had no intention of passing on cost savings to customers.
The plaintiffs allege that the Fed bowed to bank lobbyists when it set the fees, which kicked in on Oct. 1, at about 22 cents instead of the originally proposed 12 cents. Before 2010's Dodd-Frank law, unregulated fees averaged about 44 cents.
"The Federal Reserve was required by law to come up with swipe fees that were 'reasonable' and 'proportional' but what we got were neither," NRF general counsel Mallory Duncan said in a statement. "Instead, the Fed allowed themselves to be influenced by the very banks they are supposed to regulate and raised the originally proposed cap to include expenses the law said were not allowed."
But American Bankers Association CEO Frank Keating told the Associated Press that the retail groups were "seeking more profits from government price controls" and that they had no intention of passing on cost savings to customers.
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