The U.S. District Court in Washington has agreed to maintain the current regulations governing swipe fees while the Federal Reserve appeals the recent ruling that it set the cap on debit transactions too high.
U.S. District Judge Richard Leon’s decision means that current fees will remain at existing levels until the court considers the Federal Reserve’s challenge, according to published reports. The court has indicated, however, that it hopes to move quickly, with the Federal Reserve and others involved in the case required to file briefs by early December.
The Federal Reserve argued in late August that maintaining the regulations would provide stability in the debit card marketplace while disagreements on rules are settled.
The Federal Reserve said if the District Court vacated the regulations, there would be no legally binding standards for determining the permissible amount of interchange fees an issuer could receive with respect to a debit card transaction. There also would be no limitations on exclusive routing restrictions imposed by issuers and payment networks.
Judge Richard Leon in late July ruled that the Federal Reserve disregarded Congressional intent when deciding how much banks can charge for the transactions under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Federal Reserve announced late Aug. 21 that it would appeal that ruling.
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