Banking and Finance Law Daily Wrap Up, CREDIT, DEBIT AND GIFT CARDS—Industry groups urge Fed to scrap debit card fee cap, (Dec 9, 2025)

By Lauren Bikoff, MLS

The letter also requests that the Fed disclose 2023 survey data to shed light on the current state of the debit card market.

The American Bankers Association (ABA), along with eight additional industry groups, has submitted a letter to the Federal Reserve, urging the withdrawal of a proposed rule that would lower the cap on debit card interchange fees. The groups note there are conflicting court rulings on the proposed regulation and the data used to calculate the cap in the proposal is now out-of-date. In addition to the ABA, the letter was signed by America’s Credit Unions, Association of Military Banks of America, Bank Policy Institute, The Clearing House, Defense Credit Union Council, Electronic Payments Coalition, Independent Community Bankers of America, and National Bankers Association.

In 2023, the Fed proposed lowering the cap from 21 cents and .05 percent of the transaction, plus a one-cent fraud adjustment, to 14.4 cents and .04 percent per transaction and a 1.3 cents fraud-prevention adjustment. The proposed rule was challenged through multiple court cases. The Eastern District of Kentucky upheld the debit card interchange fee rule (see Banking and Finance Law Daily, Sept. 16, 2025), while the District of North Dakota struck it down (see Banking and Finance Law Daily, Aug. 8, 2025). Both decisions have been appealed, and the Fed has indicated that it does not intend to finalize the proposed rule until there is legal certainty on its implementation.

“Rather than leaving the debit card market in a state of uncertainty for the foreseeable future while waiting for the resolution of these ongoing court challenges, the board can provide greater certainty to debit card issuers, payment card networks, and merchants alike by withdrawing the 2023 proposed rule,” the letter said.

The groups also noted that the proposal used data from 2021 in its fee calculations, which no longer reflects the current market. They instead asked the Fed to publish data from its more recent 2023 survey of the market, which was submitted to the Board in May 2024.

“The debit card market has undergone substantial change since 2021,” the organizations wrote. While some changes “would not be fully reflected in the 2023 survey data, its publication would provide clarity on the current state of play in the debit market.”

Companies: American Bankers Association; America’s Credit Unions; Association of Military Banks of America; Bank Policy Institute; The Clearing House; Defense Credit Union Council; Electronic Payments Coalition; Independent Community Bankers of America; National Bankers Association

RegulatoryActivity: BankingOperations ChecksElectronicTransfers CreditDebitGiftCards DoddFrankAct FederalReserveSystem FinancialIntermediaries FinancialStability FinTech GCNNews PrudentialRegulation