Fed staff proposes 12-cent cap on debit card fees

WASHINGTON Thu Dec 16, 2010 2:38pm EST

WASHINGTON Dec 16 (Reuters) - U.S. banks and other debit card issuers would be allowed to charge retailers up to 12 cents per transaction, under a Federal Reserve staff proposal released on Thursday and designed to crack down on the multibillion dollar industry.

The proposed limit on so-called debit "interchange" fees seeks comment on two alternative fee structures, but both limit the maximum fee amount to 12 cents per transaction.

It also seeks comment on how to adjust fees based on fraud prevention costs.

The Fed board is expected to vote shortly on the staff proposals, with a comment period that would end Feb. 22. (Reporting by Dave Clarke, editing by Gerald E. McCormick)