Debit Fee Cap Could Lower Retailers' Prices

WASHINGTON (AP) - It was a victory of retailers over the banks.

The Senate voted Wednesday to let the Federal Reserve cut fees that stores must pay banks each time a customer swipes a debit card. At issue, billions in revenue.

Senators supporting the financial institutions' efforts to head off the proposal fell six voters short of the 60 needed to prevail. The vote was 54-45.

The tally also was a triumph Sen. Richard Durbin of Illinois. The No. 2 Democratic leader had muscled a provision into last year's financial overhaul law requiring the Fed to offer a plan for limiting the fees.

Those charges now average 44 cents per transaction and mean $16 billion annually for banks and credit card companies, according to Federal Reserve data.

The Fed proposed holding those fees to a maximum of 12 cents per swipe. A final rule must take effect on July 21. While it might still be changed, few expect it to be altered much.