What is the Durbin Amendment?

What is the Durbin Amendment?

It is the federal law on debit card fees and routing. It was added to the Electronic Fund Transfer Act as section 920 by section 1075 of Public Law 111-203, dated July 21, 2010. The Federal Reserve says Congress enacted it "as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act." It sits in the US Code at 15 U.S.C. 1693o-2. The Federal Reserve's own staff memo on Regulation II calls the provision "the Durbin Amendment."

Its core rule: "The amount of any interchange transaction fee that an issuer may receive or charge with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the issuer with respect to the transaction."

What is the debit interchange cap?

The Federal Reserve set it in Regulation II, 12 CFR part 235. An issuer may receive no more than:

• 21 cents per payment, plus
• 5 basis points (0.05%) of the payment amount, plus
• 1 cent more if the issuer meets the fraud-prevention standards in section 235.4.

On a $50 debit payment that is 24.5 cents, the figure the Federal Reserve gave in 2023. On a $1,108.33 payment it is about 77 cents. Visa's US schedule effective April 18, 2026 lists regulated debit at the same 0.05% + $0.21, with $0.01 more for issuers that certify fraud-prevention compliance.

Has the cap changed?

Not yet. In October 2023 the Federal Reserve proposed lowering it to 14.4 cents plus 0.04%, with a 1.3-cent fraud adjustment, and updating it every other year. The eCFR text for October 1, 2026 still shows 21 cents plus 5 basis points.

Which banks and cards are exempt?

• Small issuers. The cap doesn't apply to an issuer that, with its affiliates, has less than $10 billion in assets. That is why Visa publishes higher "exempt" debit rates, such as 1.65% + $0.15 for card-not-present debit.
• Some government and prepaid cards. Cards from government-administered payment programs and certain reloadable prepaid cards are exempt from the fee limits.

Does it cover credit cards?

The fee cap doesn't. It applies only to electronic debit transactions, which include general-use prepaid cards. Credit card interchange is set by each network's schedule with no federal cap.

The law does reach credit cards in other ways. Networks can't stop a business from setting a credit card minimum of up to $10, as long as it doesn't differ by issuer or network. Federal agencies and institutions of higher education may set a credit card maximum on the same terms.

What else does it give merchants?

• Routing choice. Issuers and networks can't limit a debit card to fewer than two unaffiliated networks, or stop a merchant from choosing which enabled network to route through.
• Discounts. Networks can't stop a business offering a discount for paying by cash, check, debit or credit, as long as it doesn't differ by issuer or network.

The law doesn't let a business surcharge debit cards. Visa's rules prohibit surcharging debit and prepaid cards.

General information, not legal advice.