WASHINGTON— America’s Credit Unions is hoping NCUA will follow the Office of the Comptroller of the Currency’s lead in the Illinois interchange fee fight, arguing the agency already has authority under the Federal Credit Union Act to preempt the state’s Interchange Fee Prohibition Act for federal credit unions.
Speaking with reporters Monday, Ann Petros, vice president of policy engagement and credit union operations at ACU, said the group’s newly filed reply in the Seventh Circuit reiterates its central position: that the Federal Credit Union Act gives NCUA authority to block state laws that “significantly interfere” with credit unions’ powers to offer debit and credit cards and receive revenue for offering such services to members. Petros said ACU believes federal credit unions should receive the same kind of protection national banks may receive through the OCC’s expected rulemaking, even though the FCU Act does not contain the same express preemption language as the National Bank Act.
Petros said ACU is “hopeful” NCUA will issue a similar rule or rulemaking once the OCC’s action is released, calling that step potentially important to the fast-moving Seventh Circuit appeal ahead of the IFPA’s July 1 effective date. She said such a move would not end the litigation automatically—especially after the Supreme Court’s Loper Bright decision reduced judicial deference to agency interpretations—but could still provide a “very persuasive” signal to the appellate court as it weighs whether federal law preempts Illinois’ swipe-fee restrictions.
Petros also said ACU continues to argue that Illinois’ wild-card statute should extend equivalent protection to state-chartered credit unions in Illinois if federal credit unions prevail, while out-of-state state-chartered institutions remain part of the group’s broader dormant Commerce Clause argument on appeal. And she warned that if courts do not ultimately block the law, some credit unions are already, at least anecdotally, considering whether to stop processing transactions in Illinois altogether—an outcome she suggested would create major burdens for consumers traveling through or living in the state.
The comments add to pressure already building on NCUA after CUToday.info reported the Trump Administration is moving to shield national banks through OCC action while credit unions remain exposed unless regulators or the courts intervene. As previously reported, DCUC has already urged NCUA Chairman Kyle Hauptman to determine quickly whether the agency has comparable authority, while ACU has publicly said it is confident NCUA can and should act to prevent what it has called a burdensome patchwork of state interchange laws.
DCUC’s Actions
“The same day the Office of the Comptroller of the Currency moved to advance its proposal addressing the Illinois Interchange Fee Prohibition Act, DCUC formally urged the National Credit Union Administration to take parallel action to protect credit unions and the millions of Americans—particularly servicemembers, veterans, and their families—who rely on them,” said Defense Credit Union Council Chief Advocacy Officer Jason Stverak.
Stverak noted it was not the trade group’s first engagement with NCUA on this issue.
“DCUC has previously submitted correspondence calling on the agency to evaluate and assert its authority under the Federal Credit Union Act to preempt state laws that interfere with credit unions’ ability to provide payment services,” Steverak said. “In those letters, we made clear that allowing a patchwork of state-level interchange restrictions to stand would create operational uncertainty, increase compliance burdens, and ultimately harm consumers—especially those in highly mobile military communities.
“In our most recent letter to NCUA Chairman Kyle Hauptman, sent contemporaneously with the OCC’s action, DCUC specifically requested that the agency determine whether it possesses comparable authority and, if so, to act swiftly to ensure regulatory parity with national banks,” continued Stverak. “We emphasized that failure to act risks placing credit unions at a structural disadvantage in the marketplace and undermining their ability to serve members effectively.”
Stverak contended the “bottom line is simple, credit unions should not be left exposed while banks receive regulatory protection. We continue to urge NCUA to act decisively, just as DCUC has consistently advocated in our letters and statements on this issue.”