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UPDATE 1-Retailers to ask U.S. Supreme Court to hear 'swipe fee' case

(Adds attorney quote, background)

WASHINGTON, June 2 (Reuters) - A group of retail merchants will ask the U.S. Supreme Court to take up a case involving Federal Reserve rules that allow banks to charge debit card "swipe fees" that retailers view as too high, an attorney for the merchants said on Monday.

"Given how extensive these fees are and how they affect virtually every transaction that takes place in the United States...it's a serious case that the Supreme Court ought to hear," said Doug Kantor, an attorney with Steptoe & Johnson in Washington who represents the retailers.

Fed spokesmen did not immediately respond to requests for comment.

Businesses pay the fees, also known as interchange fees, to banks when customers use debit cards to purchase goods or services. The fees are set by Visa and MasterCard and reimburse banks for costs involved in providing the cards.

The 2010 Dodd-Frank law called for the Fed to cap the fees, which were about 44 cents per transaction at the time. Retailers had argued the fees were too high and led to higher prices for consumers.

The Fed in 2011 limited swipe fees to 21 cents per transaction, but retailers said the law intended the cap to be even lower.

The National Retail Federation, whose members include Wal-Mart and JCPenney, the National Restaurant Association, and other groups, sued the Fed in 2011.

A U.S. district court in July 2013 sided with the retailers. The Fed appealed, and an three-judge appeals panel in March reversed the lower court's decision and upheld the Fed's rules.

The retailers had the option of appealing to the full appellate court or directly to the Supreme Court. The court now will decide whether or not to hear the case.

(Reporting by Emily Stephenson; Editing by David Gregorio and Cynthia Osterman)