DENVER–Credit unions are hoping Colorado’s governor will veto a card interchange bill should it reach its desk, while also preparing for a hearing next week in Chicago on interchange legislation in that state.
As the CU Daily reported here, legislation that targets credit card “swipe fees” cleared the Colorado Senate on a narrow vote last week and is now headed to the Colorado House following weeks of delay and intense debate. An amendment added during Senate debate would require businesses with more than 500 employees to use any savings from reduced fees to lower prices or increase employee wages or benefits
The measure, which is opposed by credit unions, financial institutions and issuers, would prohibit credit card companies from charging transaction fees on the sales tax portion of purchases, passed Friday by an 18-17 margin following a reconsideration vote. The Colorado law exempts institutions below the $60 billion in assets thresholds, above which there
The Colorado bill is similar to the Illinois Interchange Fee Prohibition Act (IFPA), which is scheduled to take effect July 1, 2026, and which is the subject of litigation in which credit unions are among the plaintiffs. The Illinois situation had been complicated by the Office of the Comptroller of the Currency, which has issued an interim final rule and interim final order affirming that federal law allows national banks to charge certain fees regardless of whether they are set by the bank or a third party, while also preempting a new Illinois law regulating interchange fees. The OCC announcement has been welcomed by credit unions, even though it still leaves certain state-chartered CUs in a pickle.
Ann Petros, VP-policy engagement and credit union operations at America’s Credit Unions, said she expects the Colorado House will pass the bill and send it on to the governor for his signature. The GoWest Credit Union Association and individual CUs have been fighting the bill, with CUs hopeful Gov. Jered Polis will veto the measure.
Headed to Chicago Hearing
In the meantime, Petros will be headed to Chicago for a hearing on May 13 in the Seventh Circuit Court in the case involving the Illinois interchange law, where the plaintiffs are hopeful the OCC decision will carry some weight with the court. America’s Credit Unions, the Illinois league and other plaintiffs will be submitting a supplemental briefing in follow-up to the OCC’s decision.
However, as Petros noted, the 2024 Loper Bright decision by the Supreme Court overruled the Chevron doctrine that had been precedent for 40 years in which court gave deference to federal agency interpretations of ambiguous statutes, which weakened federal regulatory authority.
Petros said the OCC decision is “persuasive” and is hopeful the court will pay attention to what the national regulator for national banks and savings associations has stated.
DCUC Submits Letter to Colorado House
Separately, the Defense Credit Union Council (DCUC) said it has submitted a letter to the Colorado House Finance Committee raising concerns over proposed legislation it warned could disrupt the payments system and negatively affect consumers, small businesses and financial institutions.
In the letter, DCUC said Senate Bill 26-134 could create unintended consequences despite its stated goals, including fragmenting the electronic payments system and increasing compliance burdens, according to the organization.
“While well-intentioned, SB26-134 introduces an unworkable framework that would fragment the payments system, increase compliance burdens, and ultimately shift costs back onto consumers and small businesses,” DCUC Chief Advocacy Officer Jason Stverak wrote in the letter.
Significant System Redesign
DCUC said provisions in the bill that would exclude taxes and gratuities from interchange fees would require significant system redesigns and introduce transaction uncertainty. It added that such changes would disproportionately affect credit unions, which it said lack the scale and revenue diversification of larger financial institutions.
DCUC also argued that similar policies have historically benefited large retailers while placing additional strain on smaller merchants and consumers.
Potential Risks to Readiness Cited
The organization further highlighted potential risks to military financial readiness, noting that reliable and secure payment systems are critical for servicemembers and their families, particularly during deployments and relocations. According to DCUC, many military households already operate with tight financial margins, and disruptions to financial services could have broader implications.
“This testimony is critical because financial stability is directly tied to military readiness,” said Anthony Hernandez, a retired U.S. Air Force colonel. “Policies that unintentionally strain the institutions serving military communities don’t just affect the marketplace, they impact force readiness, family stability, and long-term retention across the armed forces.”
DCUC said it is urging lawmakers to reconsider the legislation and expressed willingness to work with policymakers on alternatives that protect consumers while maintaining what it described as a secure, efficient and equitable payments system.
