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US: No swipe-fee changes yet as appeal sits in limbo

By  |  September 20, 2013

A federal judge in Washington, DC said he would keep the current rules for swipe-fees in place while an appeal against the judge’s earlier decision against the policy are appealed, according to reports.

US District Judge Richard Leon entered the ruling Friday that decided the current cap on swipe fees will remain as the central bank appeals the decision to toss the current regulations.

In its argument against the rules’ appeal, the Fed wrote that retailers would “vastly prefer the status quo” instead of an unregulated “’free for all’” while an appeal is weighed. The central bank filed a request last August to have the current rules remain in place.

Judge Leon ruled earlier this year that the central bank’s cap of about 21 cents per transaction was higher than intended. If the Fed’s appeal fails, Judge Leon’s ruling will require regulators to revisit the swipe-fee policy.

Banks reportedly make about $16 billion every year from the swipe-fees, but claim they would lose 45 percent of that revenue if the regulation remains.

Full Content: Bloomberg

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