The FDIC proposed a rule that says out-of-state, state-chartered banks can engage in interstate activities under the same standards that apply to national banks.
Details: Under the proposed rule:
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When host-state laws do not apply to a national bank, those laws would similarly not apply to an out-of-state state bank providing services in the host state, regardless of whether the state bank has a branch in the host state.
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Consistent with the Federal Deposit Insurance Act, the law of the state bank’s chartering state would apply.
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Interest rates state banks are permitted to charge with respect to any of their loans, which are governed by the FDI Act, would not be affected.
Input: Comments on the proposal must be received within 60 days of publication in the Federal Register.
Background: The FDIC proposal is a response to Illinois’ Interchange Fee Prohibition Act, which requires credit card companies to waive swipe fee collections on taxes and tips. The Illinois General Assembly in June voted to delay implementation of the law by a year.
ICBA View: In a national news release on the Illinois law earlier this year, ICBA and the Community Bankers Association of Illinois:
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Said they support the delay.
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Called on policymakers to fully repeal the law.
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Warned the law could drive Illinois-chartered community banks away from offering credit and debit card services in the communities they serve.