US: Federal Reserve appeals swipe fee cap rejection

The US Federal Reserve is reportedly gearing up to appeal a federal judge’s recent ruling that the bank’s cap on debit card swipe fees, set under the Dodd-Frank Act, were illegal, according to a lawyer for the Fed.

Reports say the Fed’s General Counsel Scott Alvarez told US District Judge Richard Leon in court on Wednesday that the bank will seek to maintain the cap as it appeals the ruling, which found that the data used by the Fed to set the interchange fee cap were invalid. The cap, set at 21 cents per swipe, was slammed by a retailer trade group as higher than federal officials had intended. A federal judge overturned the cap last month.

Judge Leon’s ruling will require regulators to take another look at the case, though the judge agreed to maintain the cap while the Fed’s appeal is pending.

Banks have denounced Judge Leon’s ruling, claiming that the impact of such a decision would cause the banks to lose 45 percent of revenue made from swipe fees. But retailers and consumers alike have rallied against swipe fees as major stores from around the nation ban together to reject Visa and MasterCard’s proposed record-setting settlement of $7.25 billion to end a lawsuit against the credit card giants over swipe fees.

Full Content: Reuters and Bloomberg

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