Fed may reconsider plan to limit debit-card fees

WASHINGTON - The Federal Reserve told Congress on Thursday that it may reconsider its proposal to limit the fee that banks charge merchants for debit-card transactions to 12 cents per swipe, the latest twist in a battle over billions of dollars.

Fed Governor Sarah Bloom Raskin made the remark at a House hearing at which lawmakers of both parties attacked the Fed's plan and asked her to reconsider, saying it would batter banks still reeling from the 2008 financial crisis.

At a separate hearing, Fed Chairman Ben Bernanke said the central bank may drop an exemption its proposal would allow for smaller banks because it might leave them charging higher fees, putting them at a competitive disadvantage.


The financial-overhaul bill that President Barack Obama and Congress enacted last summer ordered the Fed to issue rules that would set the fees at a reasonable rate. Currently, merchants typically pay between 1 and 2 percent of the transaction's total and those charges average about 44 cents.

The question of where to set the fees has triggered a lobbying battle pitting merchants and some consumer groups against banks and credit-card networks.

The Fed's proposed 12-cent cap would be a major victory for merchants.

Associated Press Feb. 18, 2011 12:00 AM




Fed may reconsider plan to limit debit-card fees