Court filing states IFPA should not be enforced after OCC orders

The Office of the Comptroller of the Currency’s (OCC) recent order and rule on the Illinois Interchange Fee Prohibition Act (IFPA) confirm preemption of the state legislation, America’s Credit Unions and the Illinois Credit Union League (ICUL) wrote in a court filing this week. The organizations are currently challenging the July 1 implementation of the IFPA, which would prohibit the collection of interchange fees for tax and gratuity portions of card transactions in Illinois.

The OCC’s orders expressly provide that national banks and federal savings associations are neither subject to nor required to comply with the IFPA.

Filed in the U.S. Court of Appeals for the 7th Circuit, the brief notes that federal agencies acting within the scope of their Congressionally delegated authority may preempt state legislation, and the OCC has exercised such authority with the orders. Thus, the IFPA should not be allowed to take effect.  

Previous filings from America’s Credit Unions and ICUL have called on the appeals court to reverse the lower court’s decision on the interchange fee provisions and issue a permanent injunction to preclude enforcement.

America’s Credit Unions has engaged the administration and NCUA on the need for a similar preemption statement for credit unions.