WASHINGTON (CNNMoney) -- Banks and credit card issuers got a break Wednesday from the Federal Reserve.
The agency passed a cap on the fees that the biggest banks charge retailers when customers use debit cards, and it turned out to be more generous than some banks and card issuers had anticipated.
The Fed approved a 21-cent limit on so-called swipe fees - about half of the current average swipe fee of 44 cents. In addition, the Fed proposed a variable additional fee of a few cents to allow for the cost of fraud prevention.
On a $40 debit charge, the swipe fee could be as high as 24 cents, according to an analysis by Keefe, Bruyette & Woods.
The Fed had originally proposed a 12-cent cap back in December, but its board members said they thought their final decision took into consideration the concerns of all the industries impacted.
Banking groups say the 21 cent cap on swipe fees will slash revenue by 45%.
The Fed was expected to ease the swipe-fee cap, since Chairman Ben Bernanke had said on several occasions that he was worried about how the new rule would affect small banks, even though the law is squarely aimed at big banks.
He and other board members said the more generous cap aimed to strike a balance between retailers, banks and consumers.
Yet, Bernanke left the door open for future changes, saying that the Fed would continue to monitor the consequences of the new caps and "assess whether the statute and the rule are accomplishing their intended goals."
Last year's Dodd-Frank Act mandated the Federal Reserve to cap so-called "interchange" or "swipe" fees charged by the largest banks.
The new cap kicks in on Oct. 1, later than originally proposed, a blow to retailers.
"While we are disappointed that the Fed did not follow through to the full extent of swipe fee reform, we take some comfort in knowing that we were able to shine a light on these deceptive practices and bring some relief to merchants and their customers," said National Retail Federation President and CEO Matthew Shay.
The final impact on the banking industry and consumers will depend on how banks and retailers respond to the new caps, a Fed staffer explained. Consumers will benefit if banks don't curtail other perks nor raise other fees; and if merchants pass on savings by lowering prices on goods.
All the banks and credit unions had teamed up and lobbied hard to delay or ease the cap on fees, saying the 12-cent cap wouldn't cover their cost to fight debit card fraud, among other things.
But small banks and credit unions maintain they will be hit the hardest by the new caps, even though they are actually exempt from the new limits. They say market forces will put the crunch on them too.
Plus, there's nothing in the rules to stop mom-and-pop retailers from prohibiting customers from using debit cards issued by a smaller bank that can charge what it wants.
"The landscape of retail banking will be forever changed as a result of this congressionally mandated price fixing," said Consumer Bakers Association president Richard Hunt. "Unfortunately, it is consumers who will ultimately bear the burden of Congress' gift to big box retailers."
Other banking groups seemed more optimistic about the caps, commending the Fed for "recognizing that there are a whole range of costs for which banks should receive reimbursement," said American Bankers Association president Frank Keating.
Both sides of the swipe fee battle spent tens of millions of dollars lobbying and advertising, and claim to be looking out for consumers' pocketbooks.
And consumers are feeling an impact. For example, banks have taken steps to curtail customer reward programs and some are even threatening spending limits on debit cards, saying the new Fed crackdown leaves them no choice.
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