DCUC Urges NCUA to Oppose Illinois Law on Interchange Fees
WASHINGTON, DC (October 4, 2024) — In a letter sent on Thursday, October 3, 2024, the Defense Credit Union Council, DCUC, urged the National Credit Union Administration, NCUA, to strongly oppose a recently passed Illinois law on interchange fees on taxes and tips.
DCUC expressed concerns that the law, which prohibits credit card companies from charging swipe fees on these transactions, could severely disrupt credit unions’ operations and the financial ecosystem as a whole.
DCUC emphasized the position of the Office of the Comptroller of the Currency (OCC), which has described the Illinois law as “ill-conceived, highly unusual, and largely unworkable.” The OCC’s court filing highlighted that the law risks fragmenting the regulatory environment for financial institutions, including credit unions, which are vital to providing financial services to millions of Americans.
“The law threatens the established framework for interchange fees, which are vital to covering the costs of maintaining secure, reliable payment networks,” wrote Jason Stverak, DCUC Chief Advocacy Officer. “Without these fees, the sustainability of services provided by credit unions could be jeopardized.”
Stverak added how the state-level attempt to regulate interchange fees contradicts federal banking laws and could lead to inconsistent regulations across the country. This could create undue compliance burdens on credit unions and impede their ability to effectively serve their members.
DCUC joins the OCC in advocating for federal preemption to maintain regulatory uniformity on interchange fees, warning that the Illinois law sets a dangerous precedent for other states to enact similarly disruptive regulations.
DCUC urged the NCUA to consider these concerns and align with the OCC’s stance, emphasizing the potential harm to the credit union industry and the broader financial system if the law is not opposed.
For more information on DCUC’s advocacy, please visit dcuc.org/advocacy and contact Jason Stverak, DCUC Chief Advocacy Officer at jstverak@dcuc.org.
About Defense Credit Union Council (DCUC)
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 37 million members. If you would like more information about this topic, please contact DCUC at hlaverty@dcuc.org.
