The Federal Reserve Board has proposed lowering the maximum interchange fee that a large debit card issuer can receive for a debit card transaction. The proposal would also establish a regular process for updating the maximum amount every other year going forward.

Currently, merchants pay large card issuers 21 cents plus 0.05 percent of the transaction amount, which is the level that was set by the Fed in 2011 The Wall Street Journal reported. The new proposal would reduce the fees to 14.4 cents plus 0.04 percent of the transaction amount.

Merchants argue that swipe fees for credit and debit cards drive up costs for U.S. shoppers, the Journal reported, while banks maintain that there is no evidence that reduced fees will mean lower prices for consumers.

Banks subject to the cap received $16.6 billion of these fees in 2022, according to trade publication Nilson Report, cited by the Journal. The banks say the fees help pay for keeping debit-card transactions safe from fraud.

A section of the 2010 Dodd-Frank law called the Durbin amendment gave the Fed the power to set caps for banks and other financial institutions with $10 billion or more in assets.

“The proposal would adjust the interchange fee cap to reflect changes in issuer costs since the rule first took effect,” the Fed said in its announcement. “For example, the cap on an average-sized $50 debit card transaction would decline from 24.5 cents under the current rule to 17.7 cents under the proposal.”

Federal Reserve Governor Michelle W. Bowman dissented.

“The proposal ... acknowledges that a lower interchange fee cap will result in an ongoing, permanent decrease in gross revenue from interchange fees,” she said in a statement. “This consequence will be felt at banks of all sizes. While the banking system remains strong and resilient, I am concerned that the cumulative effect of regulatory changes—including a lower interchange fee cap, higher capital requirements, new debt-funding requirements, increasing data collection requirements, and many others—could pose ongoing risks to the health of certain financial institutions and the overall U.S. banking system.”