Corner Post, Inc. v. Board of Governors of the Federal Reserve System – 8th Circuit Strikes Down Federal Reserve Debit Swipe Fee Cap

On October 26, 2026, the United States Court of Appeals for the Eighth Circuit (8th Circuit) issued an opinion concluding that the Federal Reserve’s current debit card interchange cap violates the Durbin Amendment, and exceeds the authority granted to it by Congress. According to the court, the Durbin Amendment requires interchange fees to be based on the “incremental cost” of processing a particular debit card transaction and expressly prohibits consideration of costs that are not specific to an individual transaction. In reaching its decision, the 8^th Circuit emphasized that “incremental cost” means the marginal cost or processing an individual transaction, and not broader operating costs incurred by financial institutions.

The impact of the court’s holding is that the Federal Reserve must base its interchange fee methodology on debit card transaction processing costs, rather than on broader fixed bank costs. If the Federal Reserve ultimately adopts a lower fee structure that more closely tracks actual transaction-specific processing costs, restaurants and other merchants could realize a substantial savings on debit card acceptance costs nationwide. 

The RLC continues to monitor separate litigation in Linney’s Pizza v. Federal Reserve, pending in the 6th Circuit, and based on a Kentucky district court’s interpretation of the same rule. The 6th Circuit heard oral argument in the Linney’s Pizza matter on October 22, 2026.