Two North Dakota retail groups have filed suit in U.S. District Court, asking that the Federal Reserve Board lower the fees banks charge for processing credit card transactions.
The North Dakota Retail Association and the North Dakota Petroleum Marketers Association argue the fees, known as “swipe fees,” have been allowed to remain high while bank costs to run the credit card transactions have fallen over the past decade.
The groups also claim the Federal Reserve Board set the maximum fee cap at a level higher than what was authorized by Congress in 2010. At that time, lawmakers were trying to address what they considered were “soaring swipe fees” set by Visa and Mastercard and a lack of competition among the card-issuing banks that receive the fees.
“North Dakota merchants are willing to pay a reasonable fee for a service, but they’re tired of seeing Wall Street banks stick their hands into the pockets of local businesses,” said Mike Rud, president of the joint associations filing the lawsuit. “These fees are far higher than they need to be and take too much money out of the local economy.”
The National Retail Federation, which is not among those suing the Federal Reserve Board, issued a statement in support of the North Dakota effort.
“Legislation passed by Congress requires that these fees be kept in proportion to costs to protect merchants and their customers, but the Fed has failed to do that,” said National Retail Federation Chief Administrative Officer Stephanie Martz. “Retailers are paying twice what they should and these fees are ultimately drive up prices paid by the public. Banks should not be handed a growing windfall at the expense of Main Street stores and consumers.”