Initial Reaction To Federal Judge Approving Interchange Settlement

Research evidence excerpt

Initial Reaction To Federal Judge Approving Interchange Settlement

TD Securities (USA) LLC POLICY NOTE

June 9, 2026

■WRG Financial Services Initial Reaction To Federal Judge Approving

Interchange Settlement

Jaret Seiberg THE TD COWEN INSIGHT

202 868 5313

A federal judge has given preliminary approval to the settlement in the 21-year fight between

jaret.seiberg@tdsecurities.com

merchants and networks/banks over interchange fees. As we wrote when the settlement was

announced months ago, we view this as positive for the networks and the banks even though

it will reduce interchange revenue. This is only preliminary approval. There is still a risk it could

be rejected later.

What Is Happening

U.S. District Judge Brian Cogan today gave preliminary approval to the previously reached

settlement in the 21-year fight between the merchants and the networks/banks over

interchange fees.

Our View

■We view this as positive for Visa, Mastercard and the card issuing banks as it brings this

litigation closer to ending and reduces the risk of a trial with a large cash judgment.

■Yet this is not the end of the case. This is preliminary approval. Not only does the judge need

to give the settlement final approval, but merchants can appeal the decision. It could take

until late 2026 for final approval. And appeals could stretch well in 2027.

■We note that the court gave preliminary approval to the first settlement effort in 2012 and

final approval in 2013. The U.S. Court of Appeals for the 2nd Circuit reversed the settlement

in 2016. It is why this could still take several years to conclude.

■The settlement is expected to reduce interchange fee revenue for banks by $30 billion over

the next five years. We view that as better than the alternative, which was for the case to go