Receiving Wide Coverage ...
Sideswiped: A federal judge has overturned the Federal Reserve's rule on debit card swipe fee caps, effectively stating that the central bank had set the caps too high. In the decision, the judge said the Fed's rule, which caps fees charged to merchants whenever a customer uses a debit card at 21-cents a transaction, "runs completely afoul of the text, design and purpose" of the Durbin amendment, the Dodd-Frank provision that called for the fee limits in the first place. "The decision likely will force the Fed to slash the fees, further crimping a once-lucrative business for banks and card giants," the Journal notes. But changes won't be immediate. The judge plans to give the Fed some time to develop new rules (the exact length to be determined at a later date, though he did say the process should take "months, not years") and the central bank may appeal the ruling. No word yet on whether or not it will. A spokeswoman for the Fed told a few news outlets that the central bank is reviewing the judge's decision. The Washington Post cites Guggenheim Partners' prediction that "the current fees will remain in place through 2014 or even longer." The decision is the latest instance in which a legal ruling has caused delays for regulators trying to enforce provisions of Dodd-Frank, but it is a bit unique. "Courts have struck down other aspects of the financial overhaul, but in ways that favor banks," the Times notes. "The fight over debit card fees pits the powerful industries of retailing and banking against each other."
Quantitative Easing Continues: The Scan-dominating Federal Reserve issued the latest Federal Open Market Committee statement yesterday and, while the central bank did say it would continue its bond-buying program, news outlets were left to speculate over for how much longer. Per the usual, interpretations varied slightly. "Bond Purchases by Fed Will Continue, at Least for Another Month," the headline on the Times article reads, while the Post notes that the Fed's latest statement is more cautious than June's, indicating it may continue to buy bonds past September, the previously expected date for a pullback on the easing. And here's the Journal's take: "The Fed's policy statement appeared to be crafted to avoid sending any strong new signals about the central bank's already articulated plans to scale back its bond buying later this yearbut only if the economy perks up." In other words: stay tuned.
Nominated: The White House has nominated Federal Reserve Governor Sarah Bloom Raskin for deputy Treasury Secretary. Should she be confirmed, Raskin would become the highest-ranking woman to ever serve in the Treasury Department. New York Times, Financial Times, Washington Post
Tapped: Royal Bank of Scotland is looking to make Ross McEwan, the head of its retail bank, its new CEO. Anonymice tell both the Journal and the FT that the bank is waiting on U.K. regulators to approve the appointment. Official news could come later this week. The FT calls McEwan "a safe, politically acceptable choice to succeed Stephen Hester, the former investment banker who was ousted as chief executive last month after pressure from the Treasury."
Wall Street Journal
Bank of America plans to raise fees for thousands of customers of its Merrill Lynch brokerage arm as part of an account management overhaul that could see some clients pay as much as 50% a year more for services. "The planned fee changes have upset some of Merrill's 14,000-plus advisersknown as the 'thundering herd'who are concerned that higher costs may drive clients away and reduce their ability to charge less to their best customers," the article notes.
New York Times
An analysis conducted for the paper finds that Standard & Poor's has been giving certain mortgage-backed securities higher grades than its rivals. "S.& P.'s chase for business is notable because it is fighting a government lawsuit accusing it of similar action before the financial crisis," the paper notes.
Amid new Fed chair talk, this Dealbook column from Jesse Eisinger looks at whether Scott Alvarez, the central bank's general counsel, wields "the power behind the throne."
Economist Simon Johnson believes Dodd-Frank didn't do enough to end "too big to fail." He argues "there are three issues: the powers of the Federal Reserve, the mandate of the Federal Deposit Insurance Corporation and the vulnerability of taxpayers when one or more large complex financial institutions fail."
Tech columnist Kate Murphy calls paying with bitcoins "a weirdly fun way to make transactions."