In a victory for the banking industry, a U.S. appeals court on Friday struck down a district court decision that ordered the Federal Reserve to rewrite its rules governing fees that banks collect each time a debit card is swiped, the Washington Post reported today. The ruling reverses a July decision by U.S. District Court Judge Richard Leon, who said that the central bank set the cap too high under pressure from the banking lobby. The Fed gave banks the thumbs-up to charge retailers as much as 21 cents a transaction, about half the previous 44-cent charge per swipe. Consumers will not feel any immediate impact from the ruling since banks and merchants operated under the Fed’s cap throughout the legal battle. The appeals court decision is a blow to merchants who have fought for nearly four years to limit the interchange fee, or “swipe fee.” Merchants have argued that consumers are the ultimate victims of these fees because the costs are usually passed on to them in the form of higher prices.
