DURBIN FILES AMICUS BRIEF TO THE SIXTH CIRCUIT IN LINNEY'S PIZZA, INC. V. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

The following information was released by Illinois Senator Richard J. Durbin:

The amicus brief states: "This Court should reverse 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."

WASHINGTON 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 Sixth Circuit in Linney's Pizza, LLC, v. Board of Governors of the Federal Reserve System calling for the Court to reverse the District Court's decision. In September 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, is permitted to establish a "third category" of costs, justifying a higher debit interchange fee cap.

The amicus brief, however, 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. Permitting the "third category" costs allows debit interchange fees to be higher than intended under the Durbin Amendment.

The amicus brief states, "After the Durbin Amendment was enacted, the Board initially issued a proposed rule that was consistent with the law's text and purpose, but the Board later altered its proposed rule significantly in response to heavy lobbying by the banking industry. The result was a Final Rule that perpetuated the interchange system's inefficient and excessive subsidization of banks' fixed costs and fraud losses through high debit fees that are centrally fixed by the Visa and Mastercard card network companies. The excessive fees and inefficiencies permitted by the Board's Final Rule are ultimately borne by consumers in the form of higher retail prices... The Board's decision to include so-called "third category" costs, such as fixed costs and fraud losses, in the Final Rule was in conflict with the Durbin Amendment's plain text and legislative history."

The amicus brief continued, "The deviations that the Board made from the Durbin Amendment's text and purpose in Regulation II have caused the debit system to suffer greater inefficiency and unnecessarily excessive fees with American businesses and consumers paying the price. The district court failed to recognize how the Board's Final Rule contravened the text and purpose of the Durbin Amendment, and this Court should reverse the district court's judgment."

Durbin has made it a priority to protect consumers. In 2010, the Durbin Amendment to the Dodd-Frank Act 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. This February, Durbin 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. Durbin also has filed amicus briefs in the District Court for the Northern District of Illinois and the U.S. Court of Appeals for the Seventh Circuit 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. In 2025, the average American family paid more than $1,200 per year in swipe fees, while Visa and Mastercard have profited $118.8 billion from swipe fees.

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