Within a month, two U.S. district judges ruled in cases challenging swipe fee regulation. Both lawsuits were brought against the Federal Reserve over its implementation of the Durbin Amendment. Back-to-back lawsuits point to fundamental issues with the underlying law. When the law distorts a market, nothing built on top of it can ever stand securely.

The Durbin Amendment, passed in 2010 under the Dodd-Frank Act, capped debit card interchange fees, which are charged whenever a card is used at checkout. The limit is set through rulemaking by the Board of Governors of the Fed. Known as Regulation II, the board’s rule caps these fees at $0.21, allowing for another 0.05% of the transaction cost (ad valorem) and a $0.01 adjustment for fraud prevention. The rule only applies to large issuers with $10 billion or more in assets.