The Eighth Circuit affirmed on 26 October 2026 the district court's judgment vacating the Federal Reserve's 21-cent cap on debit card interchange fees. The court remanded the matter to the Federal Reserve to develop a fee structure consistent with the statute. Judge Stras wrote the opinion in Corner Post, Inc. v. Board of Governors of the Federal Reserve System for a unanimous panel.
The reasoning turns on the phrase incremental cost in 15 U.S.C. § 1693o-2, which the court read as marginal cost after examining economic literature, dictionaries and the statutory text. The district court had concluded that the Board improperly considered several categories of costs when it set the rate. These included fixed costs associated with authorization, clearance and settlement, network processing fees, fraud-monitoring expenses and fraud losses, and the Eighth Circuit affirmed that judgment. The court left the Board latitude on method. It suggested that the agency could consider a proxy, potentially including average variable cost, if it bears a reasonable relationship to the marginal costs incurred by cardholder banks. It then set a floor: the agency must nevertheless distinguish costs that are transaction-specific from those that are not, and cannot simply select a cap and assume the number is close enough.
Nothing changes for issuers or acquirers yet. The decision does not become effective until the mandate issues, and under the Federal Rules of Appellate Procedure the mandate ordinarily follows the deadline for seeking rehearing or an order denying a timely rehearing petition. The district court ordered vacatur but stayed the effect of its decision pending the appeal, so the 21-cent cap has remained in force throughout and stays in force until the mandate issues.
The court did not establish a new cap. Nor did it direct the Board to adopt the 14.4-cent cap it has proposed but not adopted. The timing and implementation of any change depend on the subsequent proceedings, which could include a petition for rehearing en banc or for certiorari as well as further proceedings at the Board. The stakes are set out in the Board's own network-level data: for 2024 it reports an average interchange fee on covered debit transactions of 22 cents for Visa and 24 cents for Mastercard, both figures sitting just above the 21-cent component the court has now set aside.