The U.S. Supreme Court allowed a North Dakota merchant to sue the Federal Reserve over debit card interchange caps, even though the merchant opened after the statute of limitations had expired. Historically, courts ruled the six-year limit under the Administrative Procedure Act starts at enactment.
In 2014, merchants sued the Fed over the Durbin Amendment cap, but the Supreme Court declined to hear it. In 2018, a North Dakota truck stop opened and joined a 2021 lawsuit against the cap. Lower courts dismissed the case due to the expired statute of limitations. However, in July 2024, the Supreme Court ruled the period starts when a business is injured by the regulation. The ruling clarifies that the limitations period starts when a business begins paying fees.
As of July 15, 2024, Target no longer accepts personal checks at the POS, citing "extremely low volumes." The retailer will still accept checks through its Target Circle Week sale and for mailed payments on Target Circle cards. Customers can continue using various payment options like Target Circle, credit and debit cards, cash, digital wallets, SNAP/EBT, and buy now, pay later plans. This move follows similar policies by Aldi and Whole Foods. Check usage, at its peak in the 1990s, declined sharply during the pandemic as contactless payments like digital wallets and peer-to-peer apps grew in popularity.
The Federal Reserve reported a 7.2 percent annual decline in check usage since 2018, though the average value of check payments has increased from $1,609 in 2015 to $2,430 in 2021. While fewer places accept checks, they remain common for high-value purchases, such as cars, due to lower transaction costs. Checks also offer users greater control over their payments.
Discover Financial Services proposed a $1.2 billion settlement in a class-action lawsuit with merchants and acquirers alleging overcharges due to "card product misclassification" from 2007 to 2017. The funds are earmarked for refunds. The misclassification, placing certain card accounts in the highest pricing tier, was revealed in a July 2023 earnings call by then-CEO Roger Hochschild, who subsequently resigned. This proposed settlement aligns with Discover’s efforts to finalize its acquisition by Capital One Financial Corp., a $35.3 billion all-stock transaction aimed at creating a global payments platform with 70 million acceptance points across 200 countries.
The acquisition, pending shareholder and regulatory approvals, faces scrutiny due to the Biden Administration's stance on mega-mergers. The settlement pales in comparison to a rejected $30 billion settlement involving Visa and Mastercard, which would have reduced interchange fees and altered merchant card practices. The judge in that case deemed the savings insufficient and disproportionately beneficial to small merchants.
The Consumer Bankers Association contested a Wall Street Journal article suggesting that bankers are overreacting to a Federal Reserve proposal to reduce debit card interchange fees. The Fed proposed cutting the cap by 30 percent to 14.4 cents plus 0.04 percent per transaction, down from the current 21 cents plus 0.05 percent plus fraud prevention costs.
This reduction, under the Durbin Amendment to the Dodd-Frank Act, would lower fees on a $50 transaction from 24.5 cents to 17.7 cents. The proposal faced backlash from banks, merchants and Fed Governor Michelle Bowman, who warned it could lead banks to raise fees, potentially harming low-income consumers reliant on debit cards. For example, a recent study commissioned by the CBA predicted the new cap would increase annual bank fees for consumers from $1.3 billion to $2 billion. The CBA urged the Fed to withdraw the proposal to avoid disenfranchising low- to moderate-income families. 
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