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WASHINGTON, DC — The Electronic Payments Coalition (EPC) today filed comments with the Office of the Comptroller of the Currency (OCC) supporting its interim final rule clarifying national banks’ and their agents’ authority to set non-interest charges, including interchange, and its accompanying order preempting Illinois’ credit and debit card chaos law.
The OCC has filed legal briefs against the Illinois law under the current and previous Administrations. And, Comptrollers from both parties dating back to the Reagan Administration have supported the OCC’s preemption authority.
In comments submitted to the OCC, EPC argued the agency’s actions are necessary to preserve the uniformity, efficiency, and reliability of the national payments system and prevent a patchwork of conflicting state laws from disrupting electronic commerce.
EPC Executive Chairman Richard Hunt wrote, “The National Bank Act, signed fittingly enough by Illinois’s Abraham Lincoln, has long ensured nationally chartered banks operate under a uniform federal framework rather than a patchwork of conflicting state laws. Courts have consistently recognized state laws interfering with national banking powers are preempted under federal law. This principle is especially important in the modern payments system, where transactions move seamlessly across state lines through nationally integrated networks. Allowing individual states to impose differing interchange mandates would create operational disruption, legal uncertainty, and significant compliance burdens threatening the efficiency and reliability of the national payments system—and risk turning the Land of Lincoln into the Land of Card Chaos.”
The Coalition noted payment cards now account for roughly two-thirds of all consumer payments in the United States and depend on nationally integrated systems allowing transactions to be completed securely and efficiently across state lines. EPC warned state-specific interchange mandates would create operational burdens, legal uncertainty, and increased costs throughout the payments ecosystem.
In its filing, EPC emphasized the Illinois’ law is operationally unworkable because the current payments infrastructure was not designed to separate taxes and gratuities from transactions in real time. Implementing such requirements would necessitate costly changes across payment networks, processors, financial institutions, and merchants while exposing participants to significant legal and financial risk.
The Coalition also stressed the stakes extend well beyond Illinois. Several states have considered or are currently considering legislation modeled on Illinois’ approach, creating the potential for a fragmented regulatory landscape resulting in increased costs, reduced efficiency, and creating confusion for consumers and merchants.
EPC urged the OCC to finalize both actions promptly and continue applying the same federal preemption analysis to similar state laws in order to preserve a consistent national framework for electronic payments.
