CHICAGO—America’s Credit Unions said Monday the Seventh Circuit’s decision to vacate and remand the Illinois Interchange Fee Prohibition Act (IFPA) case back to U.S. District Judge Virginia Kendall gives financial institutions another opportunity to argue the controversial state law is preempted by federal law following recent actions by the Office of the Comptroller of the Currency.
As CUToday.info reported May 8, the Seventh Circuit vacated the Northern District of Illinois ruling and sent the case back for further proceedings after the OCC issued interim final actions stating national banks and federal savings associations are not subject to the Illinois law.
Speaking during a media briefing Monday, America’s Credit Unions Vice President Of Policy Engagement And Credit Union Operations Ann Petros said the appeals court action was taken “in response to the OCC, their recent order and rulemaking on preemption,” which she said directly addressed the rationale Judge Kendall had previously used in determining the law was not preempted under federal banking statutes. Petros added ACU and its partners argued in supplemental briefing last week that “the same rationale should apply to federal credit unions because the preemption doctrine and reasoning is the same across all federal instrumentalities and institutions.”
Petros said the district court will now reevaluate the case in light of the OCC’s actions, calling the remand “another bite at the apple.”
She added the groups Monday filed a procedural motion asking the Seventh Circuit to immediately return the case to the district court rather than wait through the normal 21-day process because the IFPA’s July 1 effective date is rapidly approaching.
Petros also acknowledged uncertainty remains for some out-of-state state-chartered credit unions and banks if the law takes effect before additional court action occurs. She said the plaintiffs continue arguing the law violates the dormant Commerce Clause by improperly burdening interstate commerce, but warned that absent a stay or legislative delay, some credit unions and state-chartered institutions could potentially still find themselves subject to compliance requirements while litigation continues.