Updated April 2026
Durbin Amendment
Section 1075 of the Dodd-Frank Act (2010) that capped debit interchange at $0.21 + 0.05% per transaction for large bank issuers and required multi-network routing on debit cards.
The Durbin Amendment is Section 1075 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, codified at 12 U.S.C. 1693o-2. Implemented by the Federal Reserve as Regulation II (12 CFR Part 235), it established two major rules for debit card interchange:
1. Interchange fee cap: For issuers with $10 billion or more in assets, debit card interchange fees are capped at $0.21 + 0.05% of the transaction value, plus $0.01 for fraud-prevention costs. As of April 2026, this cap remains unchanged from its 2011 implementation (the Federal Reserve proposed updating the cap in 2023; the final rule was still under review as of this writing).
2. Network routing requirement: Issuers must enable at least two unaffiliated networks on all debit cards, and merchants must be able to choose which network processes PIN debit transactions (Regulation II, 12 CFR 235.7). This is why debit cards often carry both a Visa/Mastercard logo and a regional network logo (STAR, NYCE, Pulse).
Exempt issuers: Banks and credit unions with assets below $10 billion are exempt from the interchange cap. These "small issuer" debit cards have higher interchange rates, comparable to credit cards. Merchants cannot identify small-issuer cards at the point of sale, so the cap's effective impact on smaller institutions is limited.
Consumer impact: The Durbin cap benefits merchants (lower card-acceptance costs) and, theoretically, consumers through lower prices. However, academic research (e.g., the Federal Reserve Bank of Richmond's analysis) suggests the price benefits to consumers from merchant cost savings were limited while bank revenue reductions led to the elimination of free checking accounts and reduced debit card rewards at large banks. Small banks were largely unaffected.
Senator Dick Durbin (D-IL) sponsored the amendment as part of the Dodd-Frank financial reform; the provision was heavily contested by the banking industry and remains a regulatory fault line between merchants (who benefit from lower interchange) and banks (who lose revenue).
Credit vs Debit: how Durbin Amendment differs
The Durbin Amendment applies only to debit card interchange at large banks. It does not cap credit card interchange. This regulatory asymmetry explains why credit card rewards are far more generous than debit card rewards at large institutions: credit interchange funds rewards; the Durbin-capped debit interchange at large banks ($0.21 + 0.05%) cannot support comparable rewards programs.
Related guides
Related glossary terms
Regulation E
The CFPB rule implementing the Electronic Fund Transfer Act (EFTA) that governs debit card fraud liability and EFT error disputes.
Signature Debit vs PIN Debit
Two routing paths for debit card transactions: signature debit goes through Visa/MC network (higher merchant fee, more protections); PIN debit goes through regional networks (lower fee, different protections).
Interchange
The fee paid by the merchant's bank to the cardholder's bank for processing a card transaction; the primary reason merchants charge different prices for card types.
Verified April 2026 against eCFR.gov and CFPB regulation pages. Not legal advice. Return to glossary →