SPPI Files Amicus Brief Supporting the Federal Reserve in Major Debit Card Case

WASHINGTON, DC—In a development that few would have predicted, the Southwest Public Policy Institute (SPPI), with the support of its legal counsel at Brownstein Hyatt Farber Schreck, has filed an amicus curiae brief alongside the James Madison Institute in support of the Federal Reserve Board in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, a case now before the U.S. Court of Appeals for the Eighth Circuit with sweeping implications for debit-card transactions nationwide.

“To be clear, siding with the Federal Reserve is not something we ever expected to do,” said Patrick M. Brenner, President of SPPI. “But this case isn’t about defending the Fed. It’s about preventing a legal interpretation that would destabilize how card payments work across the country.”

At issue is whether the Durbin Amendment permits regulators to consider certain transaction-specific costs when setting debit-card interchange fee standards. A lower court ruling held that many of these costs, including fraud prevention, transaction monitoring, and network processing, must be excluded. SPPI argues that the interpretation misreads the statute and risks imposing a de facto price control below cost on electronic payments.

The consequences could be profound.

If allowed to stand, the ruling would reshape the economics of debit transactions nationwide, affecting banks, credit unions, payment networks, merchants, and ultimately consumers. By preventing recovery of legitimate transaction-specific costs, the decision could discourage investment in payment infrastructure, weaken fraud protection, and reduce reliability and innovation in everyday card transactions.

“This is not a narrow technical dispute,” Brenner said. “Debit cards are a core component of the U.S. economy. When courts rewrite the rules governing how those transactions are priced, the ripple effects show up at the checkout counter.”

SPPI’s brief supports the Federal Reserve’s long-standing interpretation of the Durbin Amendment, which recognizes that transaction fees must remain reasonable and proportional while still allowing recovery of costs directly tied to each transaction. The brief also warns that excluding such costs raises serious constitutional concerns and could amount to an uncompensated regulatory taking.

“In our work on credit, payments, and financial access, we’ve seen this move before,” Brenner added. “When prices are forced below costs, access narrows, investment retreats, and consumers are left with fewer, worse options. This case has the potential to do that at a national scale.”

The case is docketed as Corner Post, Inc. v. Board of Governors of the Federal Reserve System, No. 25-300, before the U.S. Court of Appeals for the Eighth Circuit.