In recent years, there has been no shortage of payments policy news. From the Federal Reserve reexamining the regulated rate and clarifying routing requirements in eCommerce, to activity around open banking at the Consumer Financial Protection Bureau, to the Administration’s elimination of the penny, payments advocates have been busy – not to mention the legislative activity in Congress and various states. Things have moved much more slowly through the courts, but finally, there is some noteworthy activity, with key decisions, brief deadlines, and court dates scheduled in early 2026.
Illinois Bankers Association et al v. Raoul
No Swipe Fees on Taxes or Tips
In late 2024, the federal district court in Chicago had granted a preliminary injunction based on the state law’s alleged interference with the powers of national banks (and other types of banks) to charge interchange fees. However, in proceedings where merchant trade associations actively participated alongside the attorney general, the court reconsidered its ruling at the final injunction stage. The court concluded that because the system is set up such that card networks, not banks, set interchange fees, there was no significant interference with bank powers. The court therefore denied a permanent injunction, while acknowledging that the law will require compliance costs. However, the judge did strike down the data limitation portion of the law, as that provision arguably restricted the use of data for anything other than transaction processing, leading the court to conclude the limitation did substantially interfere with bank powers.
The bank trade associations that brought the case have already appealed the decision in the Seventh Circuit Court of Appeals, where they will ask for expedited review in the face of the law’s effective date of July 1, 2026.
Corner Post and Linney’s Pizza
Debit Reform
Two district court cases that reached opposite conclusions about the scope and legality of the Federal Reserve’s Regulation II have been appealed in separate circuits (Linney’s Pizza to the Sixth Circuit and Corner Post to the Eighth Circuit). While we await the briefing schedule for the Linney’s Pizza case, MAG joined the Retail Litigation Center (RILA’s legal arm), NACS, and other merchant associations to file an amicus brief in the Corner Post case.
The amicus brief argues that the current rule allows the inclusion of costs Congress did not authorize, forcing merchants to pay inflated fees and shifting fraud and other expenses onto businesses and consumers. By signing on, the MAG is advocating for a fair, lawful fee structure that reflects the true cost of processing debit transactions, protects merchants from excessive and unreasonable charges, and most closely follows the text and intent of the Durbin Amendment.
MDL 1720 In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation
Interchange Litigation
Proposed Settlement
In November 2025, class lawyers and defendants announced a proposed settlement with Visa and Mastercard on the injunctive aspects of the interchange litigation. The settlement will slightly reduce overall interchange fees and will liberalize certain network rules around surcharging, allowing merchants to selectively accept certain credit products. U.S. District Judge Brian Cogan, a new judge assigned to the case, will hold a hearing on April 20, 2026, on preliminary approval of the settlement. Several merchants and retail trade associations have filed objections to the proposed settlement. If the court preliminarily approves the deal, the final approval phase will follow with greater scrutiny on the proposal through the remainder of 2026.
7-Eleven Plaintiffs (Direct Action Plaintiffs) v. Visa & Mastercard
April 20 will be a busy day for payments litigation. U.S. District Judge Alvin K. Hellerstein will preside over a trial, scheduled to begin April 20, 2026, tied to the broader litigation involving a separate group of plaintiffs who opted out and pursued their own individual damages lawsuits beginning in 2013. Judge Hellerstein is 92 years old and is also presiding over the criminal case against Venezuelan leader Nicolas Maduro, which may take scheduling precedence over the interchange litigation.
Conclusion
It has been a busy several months, and there are no signs of the activity slowing down. MAG members, please engage with the MAG Advocacy and Communications Committee to learn more and stay informed by logging into your MAG Profile, and clicking on “Join a Committee or Community.”