Fed’s Debit Card Swipe Fee Appeal Hinges on Permitted Bank Costs

Judges on a federal appeals court wrestled with how the Federal Reserve determined banks’ incremental costs for processing debit card transactions, in a case that could determine whether the central bank has to rewrite a 15-year-old rule limiting “swipe fees.”

The case will likely hinge on the definition of those incremental costs, Judge David R. Stras of the US Court of Appeals for the Eighth Circuit said at oral arguments Wednesday.

The Fed is trying to overturn a decision last August from Judge Daniel M. Traynor of the US District Court for the District of North Dakota vacating provisions of ...