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The Federal Reserve is set to limit the fees that banks charge retailers for swiping debit cards to 21 cents, a higher cap than initially proposed.

Banks succeeded in convincing the Fed that its initial proposal of 12 cents was too low after a six-month lobbying blitz. They currently charge an average of 44 cents per swipe.

The Fed will formally adopt the rule Wednesday, which was required under the financial regulatory law enacted last year. The rule takes effect Oct 1, later than expected.

In addition to the 21-cent cap, the rule will also allow banks to charge a fraction more to cover the costs of fraud prevention.

The move to limit swipe fees pitted the nation’s largest banks and payment processors like MasterCard Inc. and Visa Inc. against Wal-Mart and retailers of all sizes. The decision to settle on a higher cap pushed up bank and network stocks in late afternoon trading on Wall Street.

Banks said roughly $16 billion was at stake if the 12-cent cap took effect. That would be more than 80 percent of the $19.7 billion in debit transaction fees paid by merchants in 2009, according to the Nilson Report, which tracks the payments industry.

The banks warned that they would have to make up for some revenue lost by shifting costs to consumers. Many already eliminated unrestricted free checking accounts, and some ended debit card rewards programs. Other potential actions include annual fees for using debit cards, which are already being tested in some markets.

The higher cap may lead some to avoid taking such action.

Merchant groups said that their savings would be passed on to customers in the form of lower prices. But many questioned whether retailers would simply pocket the difference. Some big retailer stocks declined late in Wednesday’s trading session no fax payday loan.

Banks and credit unions with assets under $10 billion are exempt from the rule, under the premise that they rely more on swipe fees, also known as interchange fees. But those smaller institutions argued that the exemption won’t help. That’s because it invites merchants to discriminate against their cards. It also leaves the decision on which network to use to process the transaction in the hands of merchants, who could choose to bypass networks that charge higher fees.

Fed Chairman Ben Bernanke acknowledged small banks’ concerns during a May 12 hearing by the Senate Banking Committee. He said allowing them to charge more than big banks for processing debt card transactions could make debit cards issued by smaller banks less attractive to merchants.

“There’s good reason to be concerned about it,” Bernanke said. It could result in some smaller banks “being less profitable or even failing.”

Separately Wednesday, a federal appeals court in South Dakota ruled that a lower court judge was correct to deny a preliminary injunction against the fee limits taking effect.

The case challenging the regulations’ constitutionality was brought in October by Minnesota-based TCF National Bank, the unit of TCF Financial Corp., considered the first bank to offer free checking accounts. TCF is among the banks that no longer offer free checking without requirements such as using direct deposit or maintaining minimum balances.

In a twist, TCF’s attorneys argued that the provision of the law exempting small banks and credit unions gave those unaffected banks an unfair advantage.

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A leading credit rating agency warned Monday that Greece’s crisis was putting a strain on its banks as lawmakers began debating austerity measures that must be passed if the country is to avoid running out of cash by the middle of next month.

Greece’s lawmakers have to vote in favor of a euro28 billion ($39.8 billion) package of spending cuts and tax increases before the European Union and the International Monetary Fund will release the next euro12 billion ($17 billion) batch of loans from last year’s euro110 billion ($156.3 billion) bailout package.

The austerity package is proving hugely unpopular and unions have called a 48-hour general strike in the run-up to the vote, which is expected to take place late Wednesday. Lawmakers have also to pass an additional implementation law on Thursday.

Without the bailout funds, Greece runs out of money in mid-July and faces becoming the first eurozone country to default on its debts _ a potentially disastrous event that could drag down European banks and affect other financially troubled European countries.

That fear of a potential default has been the main impetus behind a fairly sizable decline in Greek bank deposits, which the Moody’s rating agency estimated at 8 percent since the start of the year. Deposits are also falling because households are tapping into their savings during the country’s recession, which has seen the unemployment rate skyrocket to around 16 percent.

“The potential for further deposit outflows constitutes a major liquidity risk for banks as depositor sentiment is affected by negative political developments and Greece’s capability for timely repayment of its debt obligations,” Nondas Nicolaides, a vice president at Moody’s, said.

Investors appear to be cautiously optimistic that Greece’s Parliament will back the austerity measures, but many economists still think that the country will end up restructuring its euro340 billion ($483 billion) or so debt burden some time in the future, even if it gets a second financial bailout.

Because the country’s borrowing costs remain sky-high, Greece is effectively locked out of the bond markets. The original bailout had envisioned that Greece would be able to start raising money on its own next year.

European leaders are currently discussing a second bailout, which is expected to be roughly the same size as the first one but also involve the voluntary participation of private banks. French President Nicolas Sarkozy confirmed earlier that French banks are considering rolling over their holdings of Greek debt.

Prime Minister George Papandreou’s Socialist party has a five-seat majority in the 300-member parliament, so should be able to pass the bills No teletrack payday loans. However, Papandreou has faced a party rebellion over the measures, and at least two deputies have said they are considering not voting in favor.

Greece’s new finance minister, Evangelos Venizelos, was trying Monday to persuade lawmakers to back the package, arguing that it’s “absolutely essential to service the cash needs of the public sector, which is in reality the servicing of citizens’ immediate and vital needs.”

He’s also discussing with international creditors how to plug a euro600 million ($850 million) shortfall in this year’s budget, which could see extra measures included in the bills.

The rebellion peaked in a political crisis earlier this month that almost led to a government collapse. Papandreou faced down the revolt and bought time with a broad cabinet reshuffle, the cornerstone of which was the promotion of Venizelos.

The Greek government has not been able to get the support of the main opposition party despite intense pressure from European officials. The Conservative party leader, Antonis Samaras has withheld his backing, arguing that the austerity bill is flawed despite his support for certain cost-cutting measures and privatizations.

The new austerity plan runs two years beyond the current government’s mandate to 2015 and will see increases to consumer and heating fuel taxes and a drop in the minimum limit for income tax, to euro8,000 a year from euro12,000.

The measures have already sparked widespread protests including several general strikes. Groups of protesters have also been camped out in the capital’s main Syntagma Square and have vowed to encircle the parliament building on Wednesday to prevent lawmakers from entering the building and voting on the austerity bill.

Airlines were changing departure and arrival times or canceling dozens of flights after air traffic controllers said they would hold work stoppages during the general strike.

Ahead of the general strike, a communist party-backed union, PAME, held a protest at Greece’s most famous ancient site, the Acropolis, hanging banners in English and Greek over the monument’s walls reading: “The peoples have the power and never surrender. Organize counterattack.”

“It’s a symbolic act by PAME,” said activist Giorgos Peros. “We want to show to all the people of Europe and Greece that people don’t surrender to the desires of the monopolies, multinational corporations, big capital, the government, the IMF and the EU.”

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Debit cards, a gleam in bankers’ eyes 30 years ago, have become the preferred method for people to tap their bank accounts, a free and easy alternative to paper checks, live tellers or cash machines.

U.S. shoppers used them 37 billion times last year, making them more popular than credit cards (19 billion transactions) and checks (18 billion), according to the newsletter Nilson Report. Another estimate puts the figure at 45 billion debits.

But big changes are afoot that could make it much more expensive for consumers to use the cards. For years, banks subsidized most debit card holders by levying heavy fees on retailers and overdrawn consumers. Merchants paid a processing fee averaging 44 cents every time a shopper swiped a card. And careless cardholders at major banks typically got dinged $35 every time the bank covered an overdraft my credit score.

Last year the nation’s banks collected more than $50 billion from merchant fees and overdrafts. That’s likely to decline, however, thanks to rules Congress mandated after the financial crisis. Starting next month, merchants will pay just 12 cents for debit processing, unless bank lobbyists persuade the Federal Reserve to tack on a surcharge for fraud prevention. Even then, the fee would probably not exceed 18 or 20 cents.

Banks stand to lose more than $10 billion a year in merchant fees and more than $6 billion in overdraft fees. They’ll be looking to make it up somewhere.

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A drone helicopter has made an emergency rooftop landing after developing engine trouble while measuring radiation over Japan’s tsunami-hit nuclear power plant.

Plant operator Tokyo Electric Power Co. said no major damage occurred Friday to the aircraft or the reactor building roof. It was still being assessed further.

The U.S.-made drone has been used regularly to inspect hard-to-access areas of the Fukushima Dai-ichi plant crippled by the March 11 earthquake and tsunami.

A Japanese robot also failed to complete its debut mission because of mechanical problems.

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A judge has ordered car dealership Moore Jaguar to turn over property and equipment to M&I Bank or risk seizure by the sheriff’s department.

The order means even the shiny silver Jaguar sign that fronts Manchester Road could be headed for the auction block.

Judge Steven Goldman signed a court order Tuesday that allows M&I Bank to seize customer lists and files, cash, artwork, trailers and motor vehicles from the Moore Jaguar dealership at 14116 Manchester Road in west St. Louis County.

M&I Bank alleges Moore Jaguar, Missouri’s only Jaguar dealership, is in default on a loan of nearly $5 million.

Michael Daming, an attorney representing Moore Jaguar, said he had not yet seen M&I’s recent court filing or the judge’s order and declined to comment on M&I’s allegations.

If the dealership does not turn over the property, the court order allows the bank to lock or disable the property and allows the sheriff of St. Louis County to “affix notice to the collateral, identifying it is the possession of M&I Bank.” The court order does not include the real estate where the dealership is located, which is owned by a separate legal entity led by Ron Moore.

Moore Jaguar and Ron Moore have been wrangling in the courts with lenders since the start of the year. The dealership stopped selling new vehicles earlier this year, but Daming said the dealership is selling and servicing both new and used Jaguars now.

Moore Jaguar filed for bankruptcy protection in January but consented to a dismissal of the bankruptcy in April. Steven Goldstein, an attorney representing Moore Jaguar in the bankruptcy, said in April that the dealership had reached agreements with all of its lenders, and Ron Moore was seeking to sell the dealership.

But M&I Bank’s court filings this week allege the $5 million it’s owed has not been repaid.

Bruce LeMoine, an attorney representing M&I, declined to comment on the case. Calls to Jaguar North America were not returned.

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A prickly feud over money between Express Scripts Inc. and Walgreen Co. could force thousands of St loan for people with bad credit. Louisans to switch drugstores beginning in January.

Walgreens

Officials and business leaders are gathering in Joplin, Mo., today to announce a new fund aimed at expanding and attracting businesses in the aftermath of one of the nation’s deadliest tornadoes.

The new “Joplin Tomorrow” fund seeks to raise more than $10 million to spur commercial growth in the Joplin area after a powerful tornado killed more than 150 people and destroyed thousands of homes and businesses there on May 22.

The fund will provide low- and no-interest loans to businesses hoping to relocate to the Joplin region or expand there. Among the first gifts made to the fund was the Danforth Foundation’s May 27 donation of $500,000, its last donation before the foundation closed May 31 and formally ended the family’s 84-year history of philanthropy.

The Missouri Chamber of Commerce also donated $25,000 to the fund Payday advance.

The non-profit fund, which seeks to raise $10 million, asked former U.S. Sen. John Danforth for help raising money. Some of the money will be used to finance capital projects.

In a telephone interview Monday, Danforth said the new fund will supplement federal loan programs that focus on restorative efforts. Rather than just loaning money to restore what was lost, the fund seeks to expand businesses and lure new entrepreneurs to Joplin.

The fund’s long-term goal, Danforth said, is “to build something even better than what would have been the case had the disaster not occurred.”

The fund will work with the Joplin Area Chamber of Commerce to raise money. Five Joplin business leaders will serve on the fund’s board of directors:

Hours of talks between eurozone finance ministers on the imploding finances of Greece broke up early Monday morning without the ministers signing off on a vital installment of rescue loans needed to avoid bankruptcy next month.

Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers.

“We have to, of course, await this vote” by the Greek parliament, Juncker said as he left the meeting.

However, Juncker said that as long as the parliament supported the new measures, he was certain that Greece would also get a second bailout _ on top of the existing one _ that will keep it afloat over the coming years as it works to restore its struggling economy. Greek Prime Minister George Papandreou said Sunday that his country was in talks for a new bailout similar in size to the first one.

In a statement, the ministers said that the private sector would contribute to the new package of rescue loans on a voluntary basis. Banks and other private creditors will be asked to buy up new Greek bonds as old ones mature, thereby reducing the amount of money other eurozone countries and the International Monetary Fund will have to provide.

“No pressure may be exerted on the private sector,” Juncker stressed, since any sign of coercion could force rating agencies to consider the bond-rollover as a partial default. Such a negative rating could take down Greek banks and further shake other struggling euro countries like Ireland and Portugal, economists have warned.

Juncker said he planned to convene a special finance ministers meeting in the first days of July, where the remaining questions would be finalized. He said that because of the voluntary nature of the roll-over, it was too early to put a number on the contribution of the private sector.

The meeting of the 17 eurozone nations came after a tumultuous week that saw rioting on the streets of Athens, a Greek Cabinet reshuffle and days of market turmoil that sent borrowing costs spiking. A default by Greece could cause ripples around the world, disrupting the global economy similarly to the collapse of investment bank Lehman Brothers in 2008.

Just before the meeting broke up, the finance chiefs of the United States, Canada, Japan and the U.K. were updated on the discussions taking place in Luxembourg in a conference call limited to the Group of Seven rich nations, underlining the heightened level of concern over the small euro nation.

A little over a year after its first bailout, Greece is trailing its financial goals. Without passing the new austerity measures, its budget deficit will remain above 10 percent of economic output this year _ far from the promised 7.5 percent. The country’s debt is expected to reach 160 percent of gross domestic product by the end of 2011, while its economy continues to shrink.

The harsh austerity measures and the bleak outlook for the depressed Greek economy and the resulting street protests are increasingly challenging the survival of Papandreou’s government.

Opening a three-day parliamentary debate that will culminate in a confidence vote Tuesday, Papandreou blamed Greece’s bloated and inefficient state sector for bringing the country to its knees. He vowed deep changes with a fall referendum on the constitution that would make it easier to get rid of inept officials or workers.

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Regulators on Friday shut down small banks in Georgia and Florida, lifting to 47 the number of U.S. bank failures this year in the wake of economic distress and mounting soured loans.

The pace of closures has slowed, however, as the economy improves and banks work their way through the bad debt. By this time last year, regulators had closed 83 banks.

The Federal Deposit Insurance Corp. seized McIntosh State Bank, based in Jackson, Ga., with $339.9 million in assets and $324.4 million in deposits. The agency also shuttered First Commercial Bank of Tampa Bay, in Tampa, Fla., with $98.6 million in assets and $92.6 million in deposits.

Hamilton State Bank, based in Hoschton, Ga., agreed to assume the assets and deposits of McIntosh State Bank. In addition, the FDIC and Hamilton State Bank agreed to share losses on $242.1 million of McIntosh State Bank’s loans and other assets.

Stonegate Bank, based in Fort Lauderdale, Fla., is assuming the assets and deposits of First Commercial Bank of Tampa Bay.

The failure of McIntosh State Bank is expected to cost the deposit insurance fund $80 million. That of First Commercial Bank of Tampa Bay is expected to cost $28.5 million.

Georgia and Florida have been among the hardest-hit states for bank failures.

Sixteen banks were shuttered in Georgia last year. The shutdown of McIntosh State Bank brought to 13 the number of bank failures in the state this year. Regulators closed 29 banks in Florida last year. First Commercial Bank of Tampa Bay is the sixth Florida lender shut down this year.

California and Illinois also have seen large numbers of bank failures easy payday loans.

In 2010 regulators seized 157 banks, the most in a year since the savings-and-loan crisis two decades ago.

The FDIC has said that 2010 likely would mark the peak for bank failures.

There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008 through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009. With failures slowing, its deficit narrowed in the first quarter of this year and stood at about $1 billion as of March 31.

The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.

Depositors’ money _ insured up to $250,000 per account _ is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted last July.

The number of banks on the FDIC’s confidential “problem” list edged up to 888 in the January-March quarter from 884 as of Dec. 31. The 888 troubled banks is the highest number since 1993, during the savings-and-loan crisis. But that doesn’t mean the pace of bank failures is likely to accelerate again because, historically, only 19 percent of the banks on the “problem” list actually fail.

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Korean Air showed off its first Airbus A380, outfitted with a unique full business class upper deck, in a pair of special flights Thursday, a day before the launch of regular international service.

Korean Air Lines Co., South Korea’s largest airline, is the sixth global carrier to introduce the hulking aircraft and the first in Northeast Asia to take delivery. The plane is manufactured by Toulouse, France-based Airbus.

The jumbo passenger jet rolled down the runway at Incheon International Airport west of Seoul on Thursday in the first of two demonstration flights. It flew east across South Korea and out over the ocean, passing low near the Dokdo islets that lie in waters between South Korea and Japan before returning.

The two islets are claimed by both countries. Seoul, however, controls them and stations a contingent of police there. The territory is known as Takeshima in Japan.

Korean Air’s A380 begins international service Friday with roundtrip flights from Incheon to Japan’s Narita airport, near Tokyo, and then from Incheon to Hong Kong later the same day.

Air France, Germany’s Lufthansa, Dubai-based Emirates, Australia’s Qantas and Singapore Airlines also fly the A380.

Cho Yang-ho, Korean Air’s chairman and CEO, said that the introduction of the jet is part of the airline’s emphasis on service.

“This is another step to show our customers our comfortable and efficient airplanes,” Cho told The Associated Press on the day’s first flight, for journalists. A second demonstration flight for VIPs was also scheduled Thursday.

Cho emphasized the airline’s special configuration in which the upper deck is devoted solely to business class seats. Korean Air is so far the only airline to utilize the A380 in such a way.

Korean Air plans service to Bangkok beginning next month, to New York in August, to Paris in September and to Los Angeles in October, the airline said.

Keith Stonestreet, Airbus’ product marketing director for the A380, said that Korean Air’s launch of the plane helps his company promote market acceptance for it in Asia, which he called the “key market” for the future.

“We’re looking to the growth of the Asian airlines as being a core part of the business,” Stonestreet said. China Southern Airlines will be the next carrier in the region to take delivery later this year, with Malaysia Airlines System and Thai Airways International set for 2012, he added.

Korean Air has ordered a total of 10 A380s. The airline has also chosen to go with the fewest number of seats _ 407 _ of any airline flying the plane so far. Air France and Lufthansa have the most seats at present with 525 to 530, Stonestreet said.

Air Austral, which flies between Paris and La Reunion in the Indian Ocean, plans to take the A380 in an all economy configuration of 820 seats, he said.

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