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OCC Moves to Preempt Illinois Ban on Swipe Fees for Taxes and Tips

The action sets up a federal fight over who sets rules for card fees.

Overview

  • The Office of the Comptroller of the Currency issued notice of a pending order to override Illinois’ Interchange Fee Prohibition Act.
  • The state law would block swipe fees on the tax and tip parts of card purchases and is set to start July 1.
  • The case remains on appeal, with Seventh Circuit arguments scheduled for May 13 after a district judge upheld the law in February.
  • Gov. J.B. Pritzker said the law works, and the retail merchants group called the OCC step a favor to banks.
  • Bank and credit union leaders urged repeal and said the law would reduce access to credit, noting $1,000-per-transaction fines for violations.