ICBA supports OCC preemption of Illinois interchange law

ICBA signaled further support for OCC actions to preempt the Illinois Interchange Fee Prohibition Act.

Details:

• ICBA sent a letter to the OCC in support of its interim final order concluding that federal law preempts the IFPA as applied to national banks and federal savings associations and urged the agency to finalize the order without delay.

• In a separate letter, ICBA signaled strong support of the OCC’s interim final rule clarifying national banks' authority to charge noninterest charges and fees, including interchange fees from credit and debit card operations, and urged the agency to finalize the rule.

More: ICBA and 43 state banking associations previously said they support the OCC order, adding that the IFPA, if allowed to take effect, would pose serious risks to the efficiency, safety, and uniform national standards of the card payment system.

Background: The OCC in April issued an interim final rule and interim final order clarifying longstanding powers under federal law for national banks to charge certain fees, preempting a pending Illinois law that restricts interchange fees. Scheduled to take effect on July 1, the IFPA would prohibit the application of interchange fees on the tax and tip portion of a transaction.

Resource for Community Bankers: ICBA in February unveiled an Interchange Guide that breaks down payment card interchange and other swipe fees to help community bankers communicate about the issue with their customers.