BOSTON--As Massachusetts considers a special commission to prohibit credit card issuers from collecting interchange fees on the tax/gratuity portion of a transaction in the state, actions are underway to try and stop it.
Testifying at the request of the Cooperative Credit Union Association, America’s Credit Unions Senior Coordinator of State Outreach Alex Vereen outlined opposition before the Massachusetts Special Legislative Commission to Study the Future of Payments and Sales. The Massachusetts proposal is similar to the Illinois Interchange Fee Prohibition Act (IFPA), ACU reported.
Altering interchange calculations would negatively impact credit union operations and the members they serve, shared Vereen, urging the commission to “avoid recommendations that create new texts and gratuity data mandates, retroactive refund systems, statement disclosures, and per transaction penalties.”
Testimony highlighted that “Massachusetts can support small businesses without shifting new costs and risk back onto local community, financial institutions, members, and the payment systems that they rely on.”
The special commission “is not a simple spreadsheet adjustment. It would create a new compliance process across card processors, core providers, statement vendors, dispute platforms, merchant systems, and data files that credit unions do not control. Staff would have to identify covered transactions, match merchant documentation, confirm credits, and keep records ready for audits, disputes, or enforcement questions,” Vereen added.
These changes would save small businesses (with taxable annual sales of less than $1 million) approximately $676 per year, or $56 per month, according to America’s Credit Unions’ analysis.
Massachusetts’ 125 credit unions issued more than 7,700 business loans, totaling $4.1 billion in 2025 alone, including nearly $1 billion in small business loans originated, ACU noted.