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  • tysons1 tysons1 Jan 21, 2014 8:40 PM Flag

    this article is actually longer

    but I can't fit it all. what can't fit is not important. and I can't copy the link.

    Fed swipe-fee challenge meets skepticism at appeals court

    January 19, 2014

    Andrew Zajac
    (c) 2014, Bloomberg News.
    WASHINGTON — The Federal Reserve, caught in a multibillion-dollar fight between banks and retailers over debit-card transaction costs, drew support from a federal appeals panel for its decision to cap swipe fees at 21 cents, a ceiling that could cost financial firms $8 billion a year.

    The three-judge panel, hearing the Fed's appeal Friday of a ruling that threw out the cap, was skeptical of arguments by retailers that the Fed hadn't followed the Dodd-Frank financial reform law in setting the debit-card swipe fee. The retailers, who successfully sued the Fed in a trial court, contend the fee should be lower, and that the central bank considered too many card-provider costs in setting the cap.

    "We're trying to tell you, none of us buy that," U.S. Circuit Judge Harry Edwards of the U.S. Circuit Court of Appeals in Washington told a lawyer for the merchants.

    Circuit Judge David Tatel said that Congress intended to give the central bank room to consider costs other than those explicitly set out in the Dodd-Frank law.

    "We think there are non-incremental costs that are transaction-specific that can be included," Tatel said.

    The Fed's appeal is the latest step in a more than four- year battle over a $16 billion revenue stream for banks that has pitted retailers of all sizes, including Home Depot Inc., Wal- Mart Stores Inc. and Target Inc., against banks led by JPMorgan Chase & Co. and Bank of America Inc. Banks stand to lose about $8 billion a year if the Fed cap stays at the current level, according to a Bloomberg Government report.

    About 50 billion debit transactions took place in 2011 and the cards have eclipsed checks and credit cards as the most common form of non-cash payment, according to court documents.

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