ST. LOUIS--The Eighth Circuit Court of Appeals heard oral arguments this week in Corner Post v. Board of Governors, a lawsuit on the Fed’s debit interchange cap. In 2025, the U.S. District Court for the District of North Dakota ruled in favor of the retailers in a decision that would drastically lower interchange fee caps, America's Credit Unions noted.
America’s Credit Unions filed an amicus brief in January 2026 in the case, arguing the lower court’s decision does not align with the text, structure, and purpose of the statute, and would force the Federal Reserve to impose interchange fee caps far below the actual costs incurred by debit card issuers.
During this week’s arguments, judges and parties agreed that the case hinges heavily on the definition of “incremental cost," ACU said.
The Federal Reserve Board of Governors has not defined “incremental cost” and states there is “no single economic meaning.” During questioning, the panel of judges pushed back on the Board of Governors’ argument that both fixed and variable costs could qualify as “incremental” costs under the Durbin Amendment. A major disagreement focused on whether interchange fees should reflect true transaction-specific costs. Corner Post argued that Congress intended interchange fees to compensate issuers for costs directly tied to individual debit transactions, while the Fed Board defended the inclusion of broader operational costs in the fee cap, ACU said.
Much of the argument revolved around the scope of Congress’s mandate. The judges repeatedly mentioned the language and structure of the Durbin Amendment, questioning whether Congress intended to allow only narrow incremental-cost recovery or whether it delegated broader policymaking authority to the Federal Reserve, ACU added.