ICBA and the Independent Community Bankers of Colorado applauded Colorado Governor Jared Polis for vetoing legislation to restrict interchange fees—the second major setback for state interchange legislation this week.
Background: The Colorado bill would have restricted financial institutions from charging interchange fees on sales taxes. It is similar to a 2024 Illinois law that the state’s legislature this week delayed by a year for the second time, pushing implementation until July 2027.
ICBA, ICBC Response: In a national news release, ICBA and ICBC said the veto recognizes the interchange restrictions would disrupt the state’s payments system and harm Colorado consumers, small businesses, and community banks.
Community Bank Opposition: “ICBC and the state’s community bankers have strenuously opposed efforts to restrict the collection of interchange fees on sales taxes, and we commend Governor Polis for vetoing this unworkable legislation,” ICBC Chairman Mike Hurst said.
OCC Actions: The OCC in April issued an interim final rule and interim final order clarifying longstanding powers under federal law for national banks to charge interchange fees, preempting the Illinois law for national banks and federal savings associations while leaving it to apply to Illinois-chartered institutions.
Illinois Court Injunction: In line with the OCC’s announcement, the U.S. District Court for the Northern District of Illinois on Monday issued an injunction preventing Illinois from enforcing the law on national banks, banks chartered by states other than Illinois, federal savings associations, and the payment card networks—again leaving Illinois-chartered institutions solely subject to the state’s punitive law.
ICBA Advocacy:
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ICBA last week sent a letter to the OCC in support of its interim final order concluding that federal law preempts the IFPA as applied to national banks and federal savings associations and urged the agency to finalize the order without delay.
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In a separate letter, ICBA signaled strong support of the OCC’s interim final rule clarifying national banks' authority to charge noninterest charges and fees, including interchange fees from credit and debit card operations, and urged the agency to finalize the rule.
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ICBA and 43 state banking associations previously said they support the OCC order, adding that the IFPA, if allowed to take effect, would pose serious risks to the efficiency, safety, and uniform national standards of the card payment system.
Resource for Community Bankers: ICBA in February unveiled an Interchange Guide that breaks down payment card interchange and other swipe fees to help community bankers communicate about the issue with their customers.
