Durbin Files Amicus Brief In Support Of The U.S. District Court For The District Of North Dakota's Ruling In Corner Post, Inc. V. Board Of Governors Of The Federal Reserve System

Durbin Files Amicus Brief In Support Of The U.S. District Court For The District Of North Dakota's Ruling In Corner Post, Inc. V. Board Of Governors Of The Federal Reserve System

The District Court of North Dakota agreed with Corner Post, ruling that Reg II included cost components that the Durbin Amendment did not intend or allow, and thus the debit interchange fee cap was higher than intended

CHICAGO - U.S. Senate Democratic Whip Dick Durbin (D-IL), Ranking Member of the Senate Judiciary Committee and author of the Durbin Amendment, filed an amicus brief before the U.S. Court of Appeals for the Eighth Circuit in support of the U.S. District Court for the District of North Dakota's ruling in Corner Post, Inc. v. Board of Governors of the Federal Reserve System. In August 2025, the District Court ruled that the Federal Reserve's Regulation II (Reg II) rule, which establishes whether a debit card interchange fee is "reasonable and proportional" under the Durbin Amendment, wrongly included "third category" costs that the Durbin Amendment did not intend or allow. Due to these "third category" costs, the Fed's debit interchange fee cap in Reg II was higher than intended under the Durbin Amendment.

The amicus brief argues that the "third category" costs conflict with the Durbin Amendment's plain text and legislative history since the Amendment prohibits any costs other than the incremental costs of authorization, clearance, and settlement of a debit transaction from being included in interchange fee rates.

The amicus brief states, "Congress enacted the Durbin Amendment because American consumers and businesses deserve a debit system that is efficient, subject to competitive market forces, and free from excessively high network-established interchange fees. The Amendment was carefully crafted to promote these goals while avoiding possible negative impacts on consumers, small issuers, fraud prevention, and the overall viability of the debit system."

The amicus brief continued, "However, the Board's impermissible inclusion of third category costs in its Final Rule has countermanded the Durbin Amendment's goal of reducing the burden of excessively high interchange fees for businesses and consumers. By incorporating fixed costs, fraud losses, and other 'third category' costs into its Final Rule, the Board ended up allowing Visa and Mastercard to fix debit interchange fee rates at 22 to 24 cents per transaction-far in excess of the 4.1 cents per transaction that regulated issuers currently incur in incremental ACS costs. If the Board's improper inclusion of 'third category' costs is not corrected, not only will businesses and consumers continue to bear the burden of excessively high debit interchange fees, but fraud prevention will continue to be undermined."

The amicus brief concluded, "This Court should affirm the decision of the court below to give proper effect to the text and purpose of the Durbin Amendment by correcting the Board's Final Rule, which will aid in the efficient operation of the debit system for the benefit of consumers and our nation."

Durbin's amicus brief can be read in full here.

Durbin has made it a priority to protect consumers. In 2010, Congress passed the Dodd-Frank Act, containing the Durbin Amendment, which reduced Visa and Mastercard's excessively high debit card fees. In May 2024, Durbin submitted a letter to the Federal Reserve, urging it to further lower the base component for debit interchange fees following years of decreasing transaction-processing costs for debit card issuers. Durbin also has filed amicus briefs in the District Court for the Northern District of Illinois in support of the state's Interchange Fee Prohibition Act (IFPA). In his briefs, Durbin has argued that the Durbin Amendment established a rate ceiling for large card-issuing banks, not a uniform standard. Reg II, which is the regulation that implements the Durbin Amendment, is explicit that payment card networks may establish interchange rates that are lower than the ceiling, including by eliminating the five basis point component of the fee rate. It is consistent with the Durbin Amendment for a state law to regulate debit interchange fee amounts as long as it does not allow issuers to receive rates that exceed the maximum amount.

Durbin expanded his efforts to curb Visa and Mastercard's duopoly by introducing the bipartisan Credit Card Competition Act, which would enhance competition and choice in the credit card network market. The bill would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed. Today, Visa and Mastercard control about 85 percent of the credit card market and refuse to negotiate fair terms with Main Street merchants. Currently, the average American family pays nearly $1,200 per year in swipe fees, while Visa and Mastercard profit $111.2 billion annually from swipe fees.

The legislation, co-led by U.S. Senator Roger Marshall, M.D. (R-KS), was reintroduced last month, and President Trump has endorsed the legislation.

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