Thursday, July 22nd, 2021
Two lobbying associations that represent merchants in North Dakota have filed a lawsuit against the Federal Reserve. They’re seeking to reduce debit cost: the costs associated with the fees that merchants are obliged to pay to banks for each debit card swipe.
Lawsuit Against the Fed: Reduce Debit Cost
Have you heard about the lawsuit against the Federal Reserve filed by merchants? The purpose is to have debit costs reduced. Merchants have expressed their complaints concerning high debit fees for years. Each time a consumer swipes a debit card, merchants must pay fees to the bank. The debit cap set by the Fed is at 21 cents.
You may wonder who has filed the suit against the Federal Reserve Board of Governors. It was the North Dakota Retail Association and the North Dakota Petroleum Marketers Association who filed the lawsuit in U.S. District Court in Bismarck.
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Debit Card Fees
According to the lawsuit filed, the cap is higher than what the Durbin Amendment allows. The latter is the law that Congress passed back in 2010. It targets the “broken market” of growing swipe fees set by Visa and MasterCard and the lack of competition among the card-issuing banks receiving the fees.
Banks can charge higher fees on the condition that they set debit swipe fees themselves instead of following fees set by Visa and MasterCard. However, there’s no major bank having applied this. Did you know that the fees paid by merchants for credit/debit card processing have reached over $100 billion annually in recent years?
So, 2 trade groups that represent merchants in North Dakota have filed a lawsuit against the Federal Reserve. According to the lawsuit, the 10-year-old cap on debit fees must be lowered. For low cost merchant processing services, work with an expert payments comparison company in the U.S.