Interchange fees

Gov. Jared Polis, a Democrat, vetoed a bill passed by the state legislature last month that would have barred banks and credit card companies from charging interchange fees on taxes, arguing that the bill would create too much legal risk for businesses and consumers.

A federal judge blocked Illinois from enforcing its interchange fee ban for taxes and tips against national banks and card networks after the Office of the Comptroller of the Currency's recent intervention materially altered the court's preemption analysis.

Lawmakers early on Monday voted to push the effective date of the law, which would ban interchange fees on the tax and tip portions of transactions, to July 1, 2027, marking the second delay as merchants and banks continue to battle in court. 

Retailers say the Office of the Comptroller of the Currency's move to preempt an Illinois law undermines states' powers to curb interchange fees charged in their jurisdictions and perpetuates a system that raises costs for businesses and consumers.

Trade groups challenging an Illinois state law barring interchange fees on taxes and tips are urging a federal judge to rule by June 3 ahead of the law's July 1 effective date.

Comptroller of the Currency Jonathan Gould reiterated his pro-preemption stance Wednesday in response to a question on whether he would move to preempt other state laws — like one passed by the state legislature earlier this month in Colorado — if they come to fruition.

The National Credit Union Administration Tuesday submitted a rule to the Office of Management and Budget stating that federal law preempts state laws on interchange, blocking an Illinois statute banning the collection of swipe fees on taxes and tips.

Banking groups that sued the state of Illinois over its law barring banks from charging interchange fees on taxes and tips cheered an appeals court ruling remanding the law to a lower court and vowed to keep the law going into effect, which is slated for July 1.

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The measure, sent Thursday to the governor's desk, would mark the second state ban on interchange fees and could inform an ongoing bank-led legal challenge to a similar Illinois law.

The Office of the Comptroller of the Currency issued an interim final rule Friday to clarify banks' leeway to charge interchange fees, explicitly blocking the applicability of a law passed in Illinois that would ban charging interchange fees on taxes and tips that goes into effect in July.

Following a judge's rejection of a 2024 settlement with merchants, the card networks are offering a slightly higher interchange reduction and easing card acceptance rules. It's the latest attempt to end a legal fight that's two decades old.

A federal judge in North Dakota found that the Federal Reserve's rules capping interchange fees runs afoul of the Durbin Amendment section of Dodd-Frank, vacating the rule unless the central bank decides to appeal the decision. The decision carries implications not only for swipe fees but also how and when banking regulations can be challenged.

A U.K. judicial body says the card networks have breached competition laws, while Belgian regulators are examining Wordline for potential anti-money-laundering violations.

Illinois Gov. J.B. Pritzker, a Democrat, signed a bill that delays the implementation of the interchange law for a year while banks fight it in court.

Sen. Dick Durbin, the Senate's No. 2 Democrat, announced he will not seek reelection in 2026, concluding more than four decades in Congress. The Illinois lawmaker leaves behind a notable imprint on U.S. financial policy, particularly regarding swipe fees.

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Trade groups, citing federal banking conflicts, are asking for summary judgment to permanently block a state law banning interchange fees on taxes and tips.

Visa and Mastercard have long been in legal battles over payment fees, with out-of-court agreements proving elusive.

In a Senate Judiciary hearing Tuesday morning, some Republican lawmakers signaled openness to joining their Democratic counterparts in supporting the Credit Card Competition Act.