Fed: No Plans to Change 'Durbin Amendment' for Swipe Fees

By Jeffrey Sparshott

WASHINGTON--The Federal Reserve said Tuesday it doesn't plan to alter rules governing the fees debit-card issuers receive from merchants following a new report that showed sharp declines for most swipe fees.

A portion of the Dodd-Frank financial overhaul law, known as the Durbin amendment, directed the Fed to limit so-called swipe fees or interchange fees. As of October 2011, they were capped at about 21 cents a transaction versus a previous average of 44 cents.

The Fed report on the volume and value of interchange fee revenue said that interchange fees at institutions covered by the rule fell to an average of 24 cents per transaction during the final three months of 2011, a 52% decrease from the 50 cent average during the first nine months of that year.

At banks not covered by the rule, issuers received an average interchange fee of 43 cents per transaction, a 4% decline from the first nine months of 2011.

The regulation doesn't apply to debit card issuers with assets less than $10 billion. More than one-third of all debit card transactions were processed by issuers that were exempt from the interchange fee standard, the Fed said.

Payment card networks processed 46.7 billion debit card transactions valued at $1.82 trillion in the United States during 2011, the Fed said.

The Durbin amendment is named for Sen. Richard Durbin (D., Ill.), who authored the provision.

Write to Jeffrey Sparshott at jeffrey.sparshott@dowjones.com

  (END) Dow Jones Newswires
  03-05-131214ET
  Copyright (c) 2013 Dow Jones & Company, Inc.