U.S. District Judge Richard Leon just ruled that the Federal Reserve’s rules on debit card swipe fees are too bank friendly and ignore the statutory requirements of Dodd-Frank:
The Federal Reserve disregarded Congress’s intent when deciding how much banks can charge merchants for debit-card transactions, a judge ruled, rejecting Dodd-Frank-imposed regulations governing “swipe” fees.
U.S. District Judge Richard Leon in Washington ruled today that the Fed didn’t have the authority to set a 21-cent cap on debit-card transactions. Leon said the rule, which has been in effect since October 2011, would remain in place pending new regulations or interim standards.
“The Board has clearly disregarded Congress’s statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction,” Leon said in his 58-page ruling.
The groups, in a lawsuit filed in November 2011, said merchants will be “substantially harmed” by the fees the Fed set under the Durbin Amendment, a provision of the Dodd-Frank legislation. The rule went into effect on Oct. 1, 2011.
“The board’s final rule permits banks to recover significantly more costs than permitted by the plain language of the Durbin Amendment and deprives plaintiffs of the benefits of the statute’s anti-exclusivity provisions,” the retailers argued in their complaint.
What? The law is not friendly enough to the banks, and so the Fed draws up regulations ignoring the law?
I am so (not) surprised.