Chalk up another victory for the card networks and banks in their bid to either overturn or water down the Durbin Amendment, which directed the Federal Reserve to impose caps on the interchange fees that banks charge merchants for debit card swipe transactions.

But while the Fed's decision to lift the cap to 22 cents per transaction from 12 cents per transaction may be a significant win in a key battle, it looks like the supporters of the amendment have won the war. For now anyway. The amendment will go forward, and while the cap will be higher, it is still down substantially from the current average of 44 cents per transaction. So we're still talking about a substantial cut from the revenue these fees once brought in.

Meanwhile, a legal effort to overturn the amendment stalled at the federal appellate level. Recall also that the Senate failed to pass a bill that would have delayed implementation of the cap. As of now, the new rules are set to go into effect on Oct. 1. We'll have to see if this proves to be deleterious to small banks, which are exempt from the rule but fear that merchants will stop taking their more expensive cards. They also wonder how the exemption will be enforced. The opponents of the amendment will continue to fight via legal challenges.

For more:
- here's a Dow Jones article

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