CHICAGO--Ahead of oral arguments scheduled next week in the ongoing legal fight over the Illinois Interchange Fee Prohibition Act (IFPA), America’s Credit Unions said it has filed a supplemental brief with the Seventh Circuit Court of Appeals arguing that recent actions by the Office of the Comptroller of the Currency strengthen the case for permanently blocking the law before its July 1 effective date.
The filing—submitted jointly with the Illinois Credit Union League, Illinois Bankers Association and American Bankers Association—contends the OCC’s recent preemption order and interim final rule related to the IFPA confirm that federally regulated financial institutions cannot be forced to comply with the Illinois statute. The OCC actions explicitly state that national banks and federal savings associations are not subject to the law, which prohibits interchange fees from being charged on the tax and gratuity portions of card transactions.
America’s Credit Unions argued in the filing that because federal agencies acting under congressionally delegated authority can preempt conflicting state laws, the OCC’s actions should persuade the court to issue a permanent injunction preventing the IFPA from taking effect. The groups further argued the same reasoning should extend to federal credit unions, maintaining that the Illinois law interferes with federally granted powers in the same manner it does for national banks.
As CUToday.info’s recent reported, the OCC had moved aggressively to shield national banks from the Illinois measure while ACU and the Defense Credit Union Council continued pressing NCUA to provide comparable protections for federal credit unions.