In a follow-up to last week’s article, the NCUA has officially published its interim final rule on interchange, declaring that the Federal Credit Union Act, which grants credit unions the right to charge fees, preempts the Illinois Interchange Fee Prohibition Act (IFPA). This rule comes after a federal appeals court issued an injunction that included banks, out-of-state state-chartered banks, federal savings associations, and payment networks. Credit unions had not been included and were awaiting this rule from the NCUA.

Under the IFPA, banks and credit unions would be prohibited from collecting interchange or “swipe fees” on the sales tax portion of a transaction, as well as on any tips made with a credit or debit card. The bill has been strongly opposed by financial institutions and trade associations, who have been working to prevent its implementation since the Act’s passing in 2024. The opposition has been mildly successful in that mission. In April, the Illinois General Assembly approved a one-year delay of the bill, pushing it back from July 1, 2026, to July 1, 2027.

“Americans rely on the electronic payments system every day for its stability and predictability,” said Scott Simpson, President and CEO of America’s Credit Unions, and Libby Calderone, President and CEO of Illinois Credit Union League. “The Illinois law, driven by mega-retailers, would disrupt that system, create confusion for millions of consumers, and encroach on federal law. We appreciate Chairman Hauptman and the NCUA for their leadership in preventing a patchwork of state laws by reaffirming that credit unions are exempt from state regulations affecting non-interest charges and fees, including interchange fee prohibitions. With this federal preemption confirmed, we will continue our relentless advocacy to protect the safety and stability of the national payments system for our credit union members and the 146 million Americans who depend on them.”

The rule goes into effect on June 30th and will be open for comments until July 9th.