NCUA confirms Illinois interchange bill is preempted by federal law

The NCUA Tuesday submitted a rulemaking to the Office of Information and Regulatory Affairs to confirm that federal law preempts the Illinois Interchange Fee Prohibition Act (IFPA). The rule is expected to publish in the Federal Register imminently.

"We thank Chairman Hauptman for his leadership and commitment to ensure credit unions and their 146 million members are protected from harmful efforts to change the national payments system. The NCUA's rulemaking, now submitted to OIRA for review, confirms preemption for federal credit unions as it relates to interchange fees,” said America’s Credit Unions President/CEO Scott Simpson. “Paired with the OCC's previous actions, it is clear that state laws cannot encroach against national authorities nor undermine the safety and stability of our national payments system. We appreciate Chairman Hauptman and the agency for engaging with America's Credit Unions on this issue and defending credit unions. As we await the rulemaking's approval and publication, we are relentless in our efforts to challenge the Illinois law and other attempts to create chaos within the payments system." 

America’s Credit Unions has consistently engaged with the NCUA on the need for a rule confirming preemption before the IFPA becomes effective July 1. 

The IFPA would prohibit the collection of interchange fees for the tax/gratuity portions of card transactions in Illinois. America’s Credit Unions, the Illinois Credit Union League, American Bankers Association, and the Illinois Bankers Association have challenged the law in court, noting that it illegally encroaches on federal law. 

The U.S. Court of Appeals for the Seventh Circuit remanded the challenge to the district court earlier this month in response to similar orders* from the Office of the Comptroller of the Currency issued in April. 

*Note: The original source no longer exists. Link removed on May 26, 2026.