Big banks relieved as Fed sets debit card rule

The Federal Reserve handed a partial victory to
Wall Street on bank card fees
© AFP/Getty Images/File Spencer Platt

AFP

WASHINGTON (AFP) - The Federal Reserve on Wednesday slashed the fees which banks charge for debit card transactions, but did not cut them as deeply as initially expected, handing a partial victory to Wall Street.

Under the new rules, the fee charged for the average debit card transaction of $38 would be capped at approximately 24 cents, the Fed said in a statement announcing its decision.

Currently, the fee for an average debit card transaction is 44 cents. Banks had feared that the average fee would be cut as low as seven to 12 cents and mounted a fierce lobbying campaign to thwart the changes.