The U.S. Federal Reserve asked that its rules on debit-card transaction fees and processing be left in place while it appeals a decision that they are illegal.
Maintaining the regulations would provide stability in the debit card marketplace while disagreements on rules are settled, according to a court filing by the Fed in Washington.
If the regulations here were vacated by the District Court, there would be no legally binding standards for determining the permissible amount of interchange fees an issuer could receive with respect to a debit card transaction and no limitations on exclusive routing restrictions imposed by issuers and payment networks on debit card transactions, lawyers for the Fed wrote.
The Fed will ask the appeals court for an expedited appeal, and on that basis, the central bank has the support of retailer groups who sued to challenge the regulations, according to its filing today.
Wed rather there be no appeal, but if theres going to an appeal, wed want the existing rules to stay in place, said Craig Shearman, vice president of the National Retail Federation, one of the plaintiffs in the case. Otherwise wed be back to the wild, wild west of no caps on swipe fees.
The Fed is seeking to overturn U.S. District Judge Richard Leons ruling that the central bank improperly set the cap on debit-card transaction fees, known as swipe fees, at about 21 cents for each transaction, and neglected to bolster competition among payment networks.
The case is NACS v. Board of Governors of the Federal Reserve System, 11-cv-02075, U.S. District Court, District of Columbia (Washington).