The IFA applauded U.S. District Court Judge Richard Leon’s decision today to throw out the debit swipe fee cap rule limiting the fees that banks receive from merchants when customers use their debit cards. The IFA has lobbied aggressively alongside a broad range of other businesses for a more competitive and transparent card system that works better for consumers and merchants alike.
“We applaud the Court’s decision to invalidate a misguided rule granting banks and credit card companies a windfall of billions of dollars while saddling the nation’s franchise small businesses with drastically increased operating costs,” said IFA President and CEO Steve Caldeira. “We look forward to seeing a revised rule from the Federal Reserve that both restores normal interchange fee levels and establishes reasonable caps.”
The overturned Federal Reserve rule was prompted by an amendment to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act sponsored by Sen. Dick Durbin (D-Ill.) Judge Leon ruled that the Fed misinterpreted the intent of the Durbin Amendment, which directed the Fed to consider the costs that banks incur when setting the fee standard. The court ruling will remain in place until the Fed can agree on provisional standards or replace portions of the rule entirely.