I'm confused about recent articles regarding credit/debit card fees

[llmart]

I'm turning to the DU community because we have so many educated people in various fields as members. I think I read on DU that there is a new federal law that prohibits businesses from charging a 3% fee when a customer uses a debit card rather than a credit card. I've run into several merchants/businesses who had no idea this was now the law. I tried researching it myself and got confusing answers.

So, am I misremembering (wasn't that a Dubya word?) what I read here?

[pat_k]

1. The Felon's Credit Card Interest Cap Is a Scam

https://www.nationalreview.com/2026/01/the-credit-card-interest-cap-is-a-scam/

And, as noted in this report, the truth is that by "By Christmas, credit card bank executives had everything on their wish list." -- Gifts showered on them by this criminal administration.

https://protectborrowers.org/trumps-wall-street-watchdog-confirms-working-people-got-slammed-by-credit-card-interest-fees/

[llmart]

2. Your linked articles aren't pertinent to my question though I still appreciate them.

I'm referring to some law or act that says merchants cannot charge a 3% fee if a customer uses a debit card, but that a merchant can choose to charge a 3% fee if a customer uses a credit card.

[pat_k]

6. That goes back to Dodd-Frank 2010.

Dodd-Frank Act (specifically the Durbin Amendment) ban on surcharges for debit card transactions remains in effect. Federal law prohibits merchants from adding a surcharge when customers use a debit card, even if processed as "credit".

However, a recent August 2025 court ruling did vacate the Fed’s specific limit on swipe fees (Regulation II), though this does not authorize surcharges.

Key details regarding this regulation:

What is Allowed: Merchants are generally allowed to apply a surcharge on credit card transactions (subject to state laws and proper disclosure), but never on debit or prepaid cards.

Recent Legal Shifts (2025): While a federal judge ruled in August 2025 that the Federal Reserve's cap on the fee amount (swipe fees) was illegal, this ruling is currently being appealed and did not overturn the ban on charging consumers a fee for using a debit card.

[llmart]

7. Thank you.

I actually contacted my bank and they told me that there can be no fee on using a debit card BUT what the organization that wanted to charge me a fee was doing was calling it a "third party processing fee" which coincidentally was exactly 3%. She said it is a legal way to get around the ban on charging people for using a debit card.

I still don't understand why they would do that because with a debit card they get paid immediately but with a credit card it takes a day of two or even a personal check, since that has to clear the bank before they get the money.

[pat_k]

8. The cap on swipe fees remains 21 cents -- for now.

More from AI (Gemini)

In August 2025, a federal judge in North Dakota ruled that the Federal Reserve's long-standing cap on debit card "swipe" fees was illegal.

The ruling in Corner Post, Inc. v. Bd. of Governors of the Fed. Rsrv. Sys. found that the Federal Reserve exceeded its authority under the Durbin Amendment by setting the fee cap higher than intended by Congress.

Key Details of the August 2025 Ruling:

The Decision: U.S. District Judge Daniel Traynor vacated "Regulation II," the 2011 rule that capped debit interchange fees for large banks.

The Rationale: The court found the Fed unlawfully included costs for fraud prevention and fixed expenses, rather than limiting fees strictly to the incremental costs of processing transactions, as required by the Durbin Amendment.

Status of the Cap: The ruling was stayed (placed on hold) pending an appeal by the Federal Reserve to the 8th U.S. Circuit Court of Appeals. This means the 21-cent cap remains in place for now to avoid an immediate, chaotic, unregulated market.

Impact on Pending Rules: This ruling does not stop the Federal Reserve from moving forward with a separate 2023 proposal to lower the base debit fee from 21 cents to 14.4 cents.

Background and Future Outlook:

The lawsuit was filed in 2021 by Corner Post, a North Dakota truck stop, arguing that banks were reaping a "windfall" of billions in fees that exceeded, in some cases, the actual costs of processing.

If the ruling stands after appeals, it could significantly alter how debit card fees are calculated, potentially leading to lower costs for merchants. The American Bankers Association (ABA) and other groups have urged the appellate court to reverse the decision, arguing it could destabilize the payment system.

[Mosby]

3. Credit Card Competition Act

It's in the senate.

https://www.congress.gov/118/bills/s1838/BILLS-118s1838is.pdf

At a high level, the Credit Card Competition Act is intended to introduce additional competition into the credit card network market, which proponents argue is dominated by a small number of large networks. The bill has received bipartisan attention in prior Congresses, including Vice President Vance when he as a senator. The bill was recently reintroduced with Trump’s endorsement.

Here’s what its supporters claim it would do:

https://www.consumerfinancemonitor.com/2026/01/16/trump-takes-on-swipe-fees-what-he-said-and-why-it-matters/

It's a good bill, but the CC companies will probably kill it.

[llmart]

4. Thank you for the link.

I had already read about that act, but did not know where it stood. I assumed or read that it was already a law because I've now had three places I frequent (one was my car's dealership when I had it in for repair) with a sign posted saying there would be no fee for debit card users. I even mentioned to one person that I was pleased they knew about the new regulation. At another place the guy I was paying made the statement that there would be a 3% fee if I used a credit card.

I wish I could remember where I read it. I thought it was DU. I may contact our Attorney General's office.

[nilram]

5. It used to be part of the contract with the processing companies

but I think it must have gotten dropped. I wouldn't mind it coming back as law, but on the other hand, the transaction fees raise prices for everyone. Invisibly and without choice.