NEW YORK (AP) — Retail groups are suing the Federal Reserve, claiming the central bank didn’t follow the law when it set a cap on fees that banks can charge merchants for handling debit card purchases.
The National Retail Federation and other groups charge in the suit that the Fed buckled under pressure from bank lobbyists when it set the cap at an average of about 24 cents per transaction in late June. The cap, which took effect Oct. 1, was initially proposed at 12 cents.
The merchant groups maintain that in raising the cap, the Fed considered expenses that the law did not allow. The law is part of the financial regulatory reform passed in July 2010.
Banks lobbied hard against the rule, which cut fees that averaged around 44 cents per transaction.