Washington, D.C. -- The National Retail Federation said Thursday that it is disappointed in the final debit card swipe-fee regulations set by the Federal Reserve.
Under the new rule, the current debit card swipe-fee rate of 1%-2% of each transaction will be replaced with a flat fee of not more than 21 cents per transaction for the nation’s largest banks -- substantially higher than the flat fee of up to 12 cents the Fed originally proposed in December 2010.
“American consumers suffered a major loss today,” said NRF president and CEO Matthew Shay. “We are extremely disappointed that the Federal Reserve chose to be influenced by special interests and ignored the will of Congress and American consumers. While the rate will provide modest relief, it does not go far enough.”
Shay added that the Fed did not follow through to the full extent of swipe fee reform, but that “we take some comfort in knowing that we were able to shine a light on these deceptive practices and bring some relief to merchants and their customers.”
Even though the new regulations set Thursday are a step forward for the industry, NRF has argued that debit-card transactions should be honored at or close to face value since debit cards function as plastic checks that draw from the same bank accounts as paper checks.
Thursday’s action comes three weeks after the Senate rejected an amendment that would have delayed swipe fee reform by at least a year and required the Fed to write regulations more in favor of the banks. The amendment was defeated after NRF launched a nationwide lobbying, grassroots and media campaign.