A three-judge panel of the US Court of Appeals for the Eighth Circuit on October 26 upheld a 2025 district court ruling that vacated the Federal Reserve’s debit fee cap of 21 cents plus 0.05% of the transaction value and a one-cent fraud-prevention add-on. The court held that the Durbin Amendment lets the Fed count only costs specific to each debit transaction, and that Regulation II wrongly included banks’ fixed costs for authorisation, clearing and settlement, along with network fees, fraud-prevention costs and fraud losses.
Why it matters: The Fed now has to rebuild the cap from transaction-specific costs, though the panel said it may use a proxy such as average variable cost, and its October 2023 proposal to cut the base fee to 14.4 cents has not moved since. Bank and payment groups, including the American Bankers Association, said they were disappointed and pointed to Linney’s Pizza v. Federal Reserve, a pending Sixth Circuit case in which a Kentucky federal court upheld the Fed’s rule last year.
Source: Payments Dive, October 26, 2026
Related: TWTWIP week ending 9 October 2026 · Australia ends card surcharges on Visa, Mastercard, eftpos and Amex payments
Image: Farragutful, CC BY-SA 3.0, via Wikimedia Commons
