NACS Files Briefs in Fight Against Swipe Fees

Yesterday, NACS submitted two legal briefs as it continues its fight against swipe fees. 

In one brief, sent to the United States Court of Appeals for the Sixth Circuit, NACS along with several other cosigners, argued that the debit interchange fee cap (swipe fees) established in Regulation II improperly encompasses costs that Congress did not authorize the Federal Reserve Board to include. The brief explained the impact the inclusion of the Prohibited Costs in Regulation II’s fee cap has on retailers of all sizes. 

The brief stated: 

“Allowing banks to earn profits at this level is particularly unfair given that banks already operate at far larger profit margins than retailers do. … A reduction in debit interchange revenue need not be made up through additional cardholder fees or cuts to checking account features. Financial institutions have myriad sources of revenue, and enjoy net profit margins around 30%, meaning they are fully capable of continuing to offer debit programs and other account features and services without collecting extra-statutory debit interchange fees to which they are not entitled and, indeed, that the statutory text prohibits them from collecting.” 

In a similar 2025 case, a U.S. District judge overturned the Federal Reserve’s 2011 regulated rate for debit card swipe fees on the grounds that it was set higher than intended by Congress. U.S. District Judge Daniel Traynor ruled in favor of Corner Post, a Watford City, North Dakota-based truck stop and convenience store—and NACS member—that filed suit in 2021 saying the Federal Reserve set the regulated rate too high.  

The order does not prevent the Fed from implementing a still-pending 2023 proposal to lower the rate. 

In another brief, sent to the United States Court of Appeals for the Seventh Circuit, NACS filed a brief in regards to the Illinois swipe fee law, arguing that the new Office of the Comptroller of the Currency (OCC) rule is not effective and cannot block the Illinois law. 

The brief stated: 

“OCC’s last-minute attempt to override a duly-enacted State law does not supersede this Court’s authority to decide the preemption question. Rather, this Court must decide whether the IFPA is preempted by the National Bank Act without deference to OCC. The IFPA is not preempted, and OCC’s latest maneuvers do not change that result.” 

The Illinois Interchange Fee Prohibition Act passed in 2024 but was immediately challenged by the banking industry. After a favorable ruling in February from the U.S. District Court for the Northern District of Illinois, the law is now set to take effect in July. More than a dozen states have considered similar legislation. 

NACS will continue to advocate for the passage of the Credit Card Competition Act. You can send emails to your lawmakers voicing your support for the CCCA through our Call to Action portal. The more industry voices that speak out on the issue, the higher the likelihood of getting a vote and winning that vote. Your participation matters and makes all the difference. 

Swipe Fees