Fed May Impose Swipe-Fee Cap as It Appeals Ruling

Politics Reuters

The U.S. Federal Reserve may continue with a cap on debit card swipe fees while it appeals a July ruling that rejected it, a federal judge ruled in an order made public on Friday.

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U.S. District Judge Richard Leon ordered his own ruling stayed, pending one from a higher court, the U.S. Court of Appeals for the District of Columbia Circuit.

The 2010 Dodd-Frank financial regulatory law directed the Fed to limit swipe fees, which banks charge merchants when customers use debit cards.

In a lawsuit brought by retailers and restaurants, Leon ruled on July 31 that the Fed's cap of 21 cents per transaction was higher than Congress intended. It was a win for retailers over banks and card companies such as Visa Inc and MasterCard Inc.

The Fed appealed the ruling in August. Appeals typically take at least several months before the court rules.

The case is NACS, formerly known as National Association of Convenience Stores, et al, v. Board of Governors of the Federal Reserve System, U.S. Court of Appeals for the D.C. Circuit, No. 13-5270.