Banks Warn Free Accounts at Risk in Fed’s Debit Swipe Fee Plan

Efforts to bring more low- to moderate-income people into the banking system are at risk under the Federal Reserve’s plan to reduce caps on debit card interchange fees, banks and a prominent civil rights advocate say.

The Fed is proposing to cut the fees—charged to merchants for processing debit card transactions on networks run by Visa Inc. and MasterCard Inc.—by nearly 30%. Banks and other card issuers retain most of those fees even though the card networks set the rates. A Bloomberg Intelligence analysis says the proposal would cut nearly $3.7 billion of banks’ annual $13 billion swipe fee ...