Briefcase

Fed raises debit fee cap to 21 cents per swipe

WASHINGTON – The Federal Reserve said Wednesday that banks can only charge retailers 21 cents each time they swipe a debit card.

The board raised the cap from its initial proposal of 12 cents per swipe. Banks and big payment processors like Visa and MasterCard convinced the Fed that was too low to cover the cost of handling transactions, maintaining networks and preventing fraud.

Banks currently have no limit and charge an average of 44 cents per swipe.

The Fed voted 4-1 to adopt the rule, which was required under the financial regulatory law enacted last year. Gov. Elizabeth Duke opposed the rule. It takes effect Oct. 1, later than expected.

Associated Press

Home contract signings up sharply last month

The number of people who signed contracts to buy homes rose sharply in May, the National Association of Realtors said Wednesday. It was mainly due to an influx of spring buyers.

An index of sales agreements for previously occupied homes rose more than 8 percent, to a reading of 88.8. A reading of 100 is considered healthy by economists.

Contract signings are usually a reliable way to gauge where the housing market is headed. But the Realtors group says a growing number of buyers have canceled contracts after appraisals came in less than what they bid.

Associated Press

Jobless rate rises in 210 metro areas

WASHINGTON – Unemployment rates rose last month in more than half of the nation’s largest metro areas, driven higher by weak private-sector hiring and natural disasters.

The unemployment rate increased in 210 metro areas in May, the Labor Department said Wednesday. It fell in 131 cities and remained unchanged in 37. That’s a sharp reversal from April, when unemployment rates dropped in more than 90 percent of metro areas.

Nationwide, the unemployment rate ticked up in May to 9.1 percent and employers added just 54,000 net jobs. Employers added an average of 220,000 jobs per month in the previous three months.

Tornadoes and flooding shut some companies down in the South in late April and May. And a parts shortage stemming from the March 11 earthquake in Japan affected U.S. auto production. The metro employment data isn’t seasonally adjusted and as a result can be volatile from month to month.

One of the biggest increases was in Tuscaloosa, Ala., which was struck by a deadly tornado that killed 41 people in late April. The unemployment rate there rose from 8.1 percent in April to 9.3 percent in May.

Associated Press

Amazon drops affiliates over California sales tax

SAN FRANCISCO – Amazon.com says it will stop working with online affiliates based in California since the state passed a new rule that forces online retailers to collect sales tax there.

In an email Wednesday to California-based affiliates – individuals or companies who run websites that refer visitors to Amazon and then get a cut of any resulting sales – the Seattle-based company said it would cut ties with those who reside in the nation’s most populous state if the law became effective. Gov. Jerry Brown signed the law Wednesday as part of a larger state budget package.

In its email, Amazon.com Inc. called the bill “unconstitutional” and “counterproductive.”

Passage of the law, which is projected to net $200 million annually, makes California the latest state that has enacted such legislation.

Associated Press