WASHINGTON— Financial institutions will now be allowed to “price-fix a wide range of fees” charged to consumers and small businesses under a pair of rules issued by the Office of the Comptroller of the Currency and NCUA, according to the Merchants Payments Coalition.
The organization made the statement in response to an OCC rule contending that the National Bank Act preempts an Illinois ban on credit card swipe fees on sales tax and tips and similar measures under consideration in other states from applying to federally chartered banks, and to a similar NCUA rule saying the Federal Credit Union Act does the same for federally chartered credit unions.
Both rules, which took effect this week, were enacted following passage in Illinois of the Interchange Fee Prohibition Act, which applied to card surcharges.. The law would still have applied to state-chartered banks and credit unions, but the Illinois legislature voted to delay implementation until July 1, 2027, as the CU Daily has reported. The law seeks to ban credit card and debit card swipe fees from applying to the sales tax and tip portions of transactions.
The MPA said the new law would save Illinois business and their customers more than $500 billion a year.
‘Colossal Mistake’
“These rules are a colossal mistake that could send bank and credit union fees soaring for consumers and businesses,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said in a statement. “The OCC and NCUA are setting a dangerous precedent that endorses unfair price collusion. Collusion on credit card swipe fees has gone on for far too long and these rules not only endorse but expand it to fees charged directly to consumers. Regulators should be protecting consumers and businesses by stopping anti-competitive behavior rather than encouraging it.”
In its statement, the MPC said the OCC and NCUA rules reverse longstanding agency regulations that said fees charged by banks must be “arrived at by each bank on a competitive basis” and instead says banks can charge fees that are “set by or in consultation with third parties.”
“Doing so endorses the longstanding practice of card-issuing banks charging swipe fee rates centrally price-fixed by Visa and Mastercard, which merchants have challenged as a violation of antitrust law and common-sense policy,” the MPC stated, noting it warned in comments filed with the OCC in May that the move could apply to charges such as late fees, overdraft or over-limit fees, annual card fees and ATM fees, among others.
Support for Credit Card Bill
The MPC added that the developments come as Congress is considering the Credit Card Competition Act to address swipe fees overall rather than just those on sales tax and tips. President Donald Trump endorsed the CCCA in January, saying it is needed “to stop the out of control Swipe Fee ripoff,” the organization noted.
The MPA said that overall credit and debit card swipe fees have increased 80% since the pandemic, reaching a record $198.25 billion last year.
