The National Retail Federation today expressed disappointment in a court decision that will keep the Federal Reserve’s cap on debit card swipe fees at 21 cents rather than reducing it to a lower level.

“NRF is disappointed and remains confident that the Federal Reserve erred when it set the swipe fee cap far higher than intended by Congress,” NRF Senior Vice President and General Counsel Mallory Duncan said. “The Fed ignored congressional intent and worked to shield debit card companies and big banks. A self-described victory for the banks usually results in higher costs for consumers.”

Under the Durbin Amendment provisions of the 2010 Dodd-Frank Consumer Protection and Wall Street Reform Act, the Federal Reserve was required to adopt regulations that would result in debit card swipe fees that were “reasonable” and “proportional” to the actual cost of processing a transaction. The Fed calculated the actual average cost at 4 cents per transaction and initially proposed a cap no higher than 12 cents, but eventually settled on 21 cents after heavy lobbying from the financial services industry.

While far improved from the average of 45 cents before the cap was set, NRF thought the figure was higher than what was sought by Congress and filed an appeal in U.S. District Court in 2011 along with other retail groups. In 2013, Judge Richard Leon ruled in NRF’s favor and ordered the Fed to recalculate the cap at a lower level, but the Fed appealed. Today, the U.S. Court of Appeals in Washington overturned Leon’s ruling.

“NRF’s work over the past several years led to a cap that cut debit swipe fees in half,” Duncan said. “That has saved many retailers and consumers billions of dollars but the fees, especially for small ticket transactions, are still far too high. We are reviewing the decision and will determine whether to appeal.”

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. www.nrf.com

Note to media: NRF Advocates for Swipe Fee Reform