Retailers Tell Judges Swipe Fees Need to be Reduced

Retailers fighting for lower fees on debit-card transactions told three appellate judges the Federal Reserve erred in how it set debit interchange fees, the Wall Street Journal reported (note: subscriber-only link for the full WSJ article).

The statements were made in a brief retailers filed in response to the U.S. Federal Reserve Board’s appeal of U.S. District Judge Richard Leon's decision that rejected the swipe fee rules that have been in place since October 2011.

Retailers were required to file their response to the appeal by Nov. 20. The Fed is set to respond to the retailers’ brief in December, and oral arguments are set before the three-judge panel on Jan. 17.

The retailers told the judges that a 2011 Federal Reserve rule resulted in shop owners being charged for costs that aren’t allowed under the Dodd-Frank financial law, which directed the Fed to limit the fees.

The Fed, when appealing Judge Leon's decision, said that it followed the law. The agency also said its rules would cap the fees at about 21 cents per transaction, down from the previous average of 44 cents, the Wall Street Journal reported. However, retailers have said that before the Fed changed an earlier version of the rule to allow for additional cost recovery, the per-transaction fee was expected to be as low as seven cents.

Doug Kantor, an attorney representing the merchants, said consumers would save millions of dollars each year if the merchants prevail in the case.

 

Mindy Long's photo

Mindy Long

Before launching a full-time freelance career, Long edited NATSO's Stop Watch magazine. Prior to that Long worked as a staff reporter for Transport Topics, a weekly trade newspaper, covering freight transportation, fuel and environmental issues. In addition to covering the transportation sector, Long has written, reported and edited for a variety of media outlets. She was the Washington correspondent for WCAX-TV (CBS) in Burlington, Vt., a criminal court reporter in Chicago and a freelance copy editor for Kiplinger’s Personal Finance magazine in Washington D.C. Long hold a master’s degree from Northwestern University’s Medill School of Journalism in Evanston, Ill., and a bachelor’s degree in Communications from Westminster College in Salt Lake City.More
Source:
NATSO News Weekly (NNW)

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