The Trump administration is considering an executive order to preempt the Illinois Interchange Fee Prohibition Act that is set to take effect in July.
That’s according to a submission Tuesday from the Office of the Comptroller of the Currency, which is part of the Treasury Department, to the Office of Information and Regulatory Affairs. The notice was listed executive orders under review. Such reviews can take up to 90 days.
The listing doesn’t include the exact language of the order, just a note that it’s been submitted and is at the “interim final rule” stage. The text of the order, presumably to be signed by Republican President Donald Trump, would be disclosed later.
Spokespeople for the OCC and Treasury didn’t respond immediately to an emailed request for comment.
That Illinois law has been controversial since Democratic Gov. JB Pritzker signed it two years ago. Last year, the legislature and the governor passed additional legislation to postpone its effective date by one year.
“This rushed announcement by the federal government to usurp Illinois law is unprecedented, prioritizing the bottom line of banks and credit card companies over meaningful relief for businesses and consumers,” Rob Karr, president and CEO of the Illinois Retail Merchants Association, said in an emailed statement. “While the office has failed to explain their reasoning or allow public review, it’s clear the goal is an end-run around the legal process after a judge recently upheld the law.”
Banks that issue credit cards attacked the law early on, seeking in court to block the law from going into effect. Trade groups for the card network industry, dominated by Visa, have also bristled at the state law, with the Electronic Payments Coalition launching an Illinois ad campaign attacking it.
By contrast, merchants have lauded the law as providing needed and overdue relief from onerous fees retailers, restaurants and other businesses must pay when consumers swipe cards to pay for a transaction.
Four trade associations for banks and credit unions sued Illinois in August 2024 over the law, two months after the law was signed. It’s the first such law in the U.S. and has sparked debate over whether states can take such action in an industry where federal laws often prevail. Other states are watching for the outcome of the case.
In February, U.S. District Judge Virginia Kendall in Chicago denied the plaintiffs an injunction to halt the law, though she struck down part of the law, which limited the use of transaction data by banks, networks and other entities.
The plaintiffs appealed the decision to the U.S Court of Appeals for the Seventh Circuit that same month.
Earlier this month, the office of the state’s attorney general, Kwame Raoul, defended the law in a filing with the federal appellate court.
The OCC and ten former OCC officials have filed amicus briefs on behalf of the banks and credit unions in the case. Card networks are “critical” to card lending and deposit service powers, the former OCC officials said in their March 16 brief, and the Illinois law “significantly interferes” with those powers.
Trade groups that represent payments players, including the Electronic Transactions Association and the Electronic Payments Coalition, have also filed such briefs.
“It is consistent with where the OCC and previous comptrollers have been since day 1,” a spokesperson for the EPC said by email. “The law in Illinois and similar legislation being pushed in a handful of other states by corporate megastores is clearly preempted.”
National retail organizations contended the OCC move was wrongheaded. "The OCC is taking advocating for big Wall Street banks to a whole new level," National Association of Convenience Stores general counsel, Doug Kantor, said by email. "The Court clearly ruled that Illinois can regulate credit card swipe fees.”
“The OCC should recognize that the Illinois law is a good thing that will help people save on everything from gas to groceries," added Kantor, who is also an executive committee member of the Merchants Payments Coalition.
