WASHINGTON — The Defense Credit Union Council is urging lawmakers in Pennsylvania and New York to reject proposed interchange-fee legislation, arguing the measures would impose state-specific requirements on the national payments system and ultimately harm credit unions, military families and consumers, according to a statement from DCUC.
In letters sent to leaders in the Pennsylvania House and Senate and to New York Senate leaders, DCUC said the proposals would create operational burdens, increase compliance costs and reduce revenue that supports member services.
In Pennsylvania, DCUC called on lawmakers not to advance HB 2090 or SB 1202 in their current form.
“These bills are often described as narrow fee-relief measures, but their actual effect is broader: they would impose Pennsylvania-specific operating rules on a national payments system,” Jason Stverak, DCUC chief advocacy officer, said in the statement on behalf of DCUC.
What PA Legislation Would Do
According to DCUC, the Pennsylvania legislation would extend beyond pricing changes and require modifications to:
- Payment settlement processes
- Dispute resolution procedures
- Fee structures
- Merchant-credit workflows
- Tax documentation requirements
DCUC said those changes would increase compliance expenses and reduce card-program revenue for not-for-profit credit unions, potentially affecting member pricing, rewards programs, fraud prevention capabilities and access to credit.
The organization also tied the issue to military readiness, citing data from Military OneSource and the 2024 Active-Duty Spouse Survey that found financial stress influences retention decisions among servicemembers and military families.
Has Not Lowered Prices
According to DCUC, previous interchange regulation has not consistently lowered consumer prices. The group cited findings from the Federal Reserve Bank of Richmond indicating 75% of merchants reported no price changes following federal debit interchange regulation, while only 2% reported price decreases.
DCUC additionally referenced an April 2026 determination by the Office of the Comptroller of the Currency that concluded federal law preempts Illinois’ interchange law for national banks and federal savings associations because of concerns tied to operational complexity and implementation costs.
Attention to Interchange Act in NY
Separately, DCUC urged New York lawmakers to oppose S5587A, known as the Interchange Fee Prohibition Act, as well as related interchange legislation pending in the state.
“These bills would not operate as a simple pricing correction,” Stverak said in the statement. “They would instead impose state-specific operating rules on a national payment system, with material risk for consumers, smaller financial institutions, and military households.”
DCUC said the New York proposal would create new requirements affecting authorization, settlement, reconciliation, compliance and data governance. The organization argued that a state-by-state approach to interchange regulation would fragment national payment rails, increase operational complexity and expose institutions to greater litigation and compliance risk.
Referencing the OCC’s analysis of Illinois’ law, DCUC said the agency warned that multiple state carveouts could create what it described as a “complex, potentially unworkable, and destabilizing standard” for the payments system. According to DCUC, the OCC estimated that absent preemption, OCC-supervised institutions could face more than $232 million in one-time system upgrade expenses, roughly $145 million annually in manual documentation processing costs during early implementation years, and approximately $200 million in lost issuer revenue.
Research Cited
DCUC also cited research it said suggests interchange regulations have not reliably reduced consumer prices and may instead shift costs through higher fees, reduced rewards programs or more limited access to credit.
“DCUC will continue forcefully advocating against harmful policies that would weaken the ability of credit unions to serve military families, local communities and the broader economy, while fragmenting the integrity of the national payments system,” said Anthony Hernandez in the statement. “Credit unions are mission-driven institutions built to serve people, not shareholders, and lawmakers must ensure public policy strengthens that mission instead of undermining the financial stability, access, and support millions of Americans rely on every day.”
America’s Credit Unions With FHFA
Separately, in follow up to Executive Order “Promoting Access to Mortgage Credit” issued in March, it joined with other financial services, real estate and housing associations in a meeting with HUD.
The organizations had previously joined in a letter to HUD outlining policy opportunities with the potential “to improve the availability and affordability of mortgage credit.”
In the meeting with HUD, participants raised recommendations to align appraisal standards between the Federal Housing Administration and VA Home Loan Program and sought clarity around distinctions between safety and habitability concerns that require repairs before closing versus cosmetic concerns in an appraisal inspection and also sought expanded post-closing repair flexibility.
America’s Credit Unions said a meeting has been scheduled for Thursday with the FHFA to address the same issues.
