In a court hearing retailers will argue “that the Federal Reserve Board strayed from the instructions of Congress when it instituted the cap on interchange fees last year," writes American Banker’s Kevin Wack.
At issue is the amount of the cap that card issuers (with over $10 billion in assets) can charge retailers for debit transactions. The Fed first came up with 12 cents, but made the final rule 21 cents.
The Fed’s "reading of the law allows it to include certain costs beyond the incremental costs of authorization, clearing and settlement — which, according to the retailers, is all that the law allows," concludes Wack from court papers.
"They can't substitute their own policy choices for Congress' policy choices," says Douglas Kantor, a lawyer for the retailers.
For the full piece see "
