Thursday, June 30, 2011

At Behest of Banks, Fed Relaxes Debit Card Regs in Final Rule

by Marian Wang
ProPublica, June 30, 2011, 11:07 a.m.

Putting an end to one of the biggest lobbying fights of the year, the Federal Reserve yesterday finalized rules capping the transaction fees that merchants pay to banks whenever a customer makes a purchase with a debit card. As it turns out, neither the banking industry nor the retail sector are too happy about the final result.

The finalized rule caps debit card fees at 21 to 24 cents per transaction for banks with more than $10 billion in assets. Yes, that’s about half of what current fees are, but it’s double the 12-cent cap that the Fed had originally proposed in December.

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