WASHINGTON, March 21 (UPI) -- A U.S. appeals court ruling Friday upheld a Federal Reserve rule on fees for swiping debit cards that critics say benefits banks at the expense of retailers.
The court in Washington reversed a district judge's decision that found the Fed violated the intent of the 2010 Dodd-Frank law, the Wall Street Journal reported. The law mandated Fed regulations aimed at ensuring "swipe fees," paid every time a customer pays with a debit card, are set to cover the actual cost of the transaction.
U.S. District Judge Richard Leon stayed his order last year pending appeal, so the old fee schedules remain in place. Those cap swipe fees at 21 cents with the possibility of an additional few cents to cover fraud.
Critics say the Fed misinterpreted the law. The appeals court suggested that Congress did a poor job of writing the legislation.
"Today's opinion by a panel of appellate judges is a giveaway to the nation's most powerful banks and a blow to consumers and small businesses across America," Sen. Dick Durbin, D-Ill., said. "The court completely ignored how the Federal Reserve's swipe fee rule allowed Visa and MasterCard to dramatically increase debit swipe fees on many small businesses, contrary to Congress's clear language and intent."
