Preemption—Federal Credit Union Non-Interest Charges and Fees

The League of Credit Unions & Affiliates supports the NCUA's interim final rule, arguing that it provides necessary federal preemption to protect credit unions from a patchwork of state interchange fee restrictions. They emphasize that the rule ensures parity with national banks and prevents the disruption of the national payments system.

Golden 1 Credit Union supports the NCUA's interim final rule clarifying its preemption authority over non-interest charges and fees, specifically regarding interchange fees. The organization argues that the rule is necessary to maintain the viability of card networks, ensure fraud prevention, and protect consumers from higher costs and reduced payment options.

A coalition of trade associations representing credit unions and banks supports the NCUA's interim final rule regarding the preemption of state laws on non-interest charges and fees. They argue that the rule protects federal credit unions from costly and disruptive state-level regulations, such as Illinois' interchange fee prohibition, while maintaining a uniform national payments system.

Joseph Boeser of Firefighters First Federal Credit Union expresses strong support for the NCUA's interim final rule confirming that federal law preempts state-level interchange fee prohibitions. The commenter argues that state-by-state mandates create unworkable compliance risks and that the rule is necessary to protect the stability of the national payment card system and the financial services provided to credit union members.

Envisant, a credit union service organization, supports the NCUA's interim final rule clarifying its preemption authority regarding non-interest charges and fees. They argue that the Illinois Interchange Fee Prohibition Act is misguided and could disrupt the payment card network, increase costs for consumers, and limit services for credit union members.

The Food Industry Association (FMI) opposes the NCUA's interim final rule, arguing that it endorses anticompetitive fee-fixing by credit card networks and was issued through an improper, truncated rulemaking process. They urge the NCUA to rescind the rule to protect merchants and consumers from excessive swipe fees and to allow for a proper Administrative Procedure Act process.

The University of Illinois Community Credit Union supports the NCUA's interim final rule clarifying its preemption authority against state laws like the Illinois Interchange Fee Prohibition Act. The credit union argues that complying with such state-specific laws is operationally unfeasible for a smaller institution and would disrupt the seamless payment card network, potentially harming consumers.

Wellby Financial supports the Interim Final Rule because it provides regulatory clarity and a consistent federal framework for non-interest charges and fees. They argue that a uniform standard reduces operational complexity, preserves competitive equity with national banks, and allows credit unions to reinvest interchange revenue into fraud mitigation and member services.

The National Lumber and Building Material Dealers Association (NLBMDA) opposes the NCUA's Interim Final Rule because it adopts an overly broad view of preemption that risks displacing state-level policies, such as Illinois' ban on interchange fees on taxes and gratuities. The association argues that the rule fails to account for the significant financial burden that rising interchange fees impose on small and mid-sized merchants in the lumber and building materials industry.

Rebecca Neades of GreenState Credit Union supports the NCUA's interim final rule clarifying preemption authority over non-interest charges and fees. The credit union argues that the Illinois Interchange Fee Prohibition Act is unworkable and would impair their ability to offer card products and invest in fraud prevention and technology.