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Retail groups sue over debt card fee rules
NEW YORK — Retail groups are suing the Federal Reserve, claiming the central bank didn’t follow the law when it set a cap on fees that banks can charge merchants for handling debit card purchases.
The National Retail Federation and other groups charge in the suit that the Fed buckled under pressure from bank lobbyists when it set the cap at an average of about 24 cents per transaction in late June. The cap, which took effect Oct. 1, was initially proposed at 12 cents.
The merchant groups maintain that in raising the cap, the Fed considered expenses that the law did not allow. The law is part of the financial regulatory reform passed in July 2010.
Banks lobbied hard against the rule, which cut fees that averaged around 44 cents per transaction.
More clarity mulled on interest rate policy
Federal Reserve policymakers this month discussed how they could give businesses and investors more information about what might trigger an increase in interest rates, according to minutes of the Nov. 1-2 meeting.
But the Fed held off making any changes.
A panel headed by Vice Chairman Janet Yellen is exploring ways to provide more information on future central bank moves. More clarity on interest rate policy could help reassure investors and businesses that rates will stay low.
At its August meeting, the Fed said it planned to keep short-term rates near zero until at least mid-2013, as long as economic growth remained weak.
The Fed has kept its key short-term interest at a record low since December 2008. That is the rate that banks charge on overnight loans and it serves as the benchmark for millions of business and consumer loans.
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