WASHINGTON, D.C. — The Electronic Payments Coalition (EPC) today said the Federal Deposit Insurance Corporation’s proposed rule addressing parity between state-chartered and national banks should serve as another warning to state lawmakers considering legislation that would impose state-specific mandates on the nation’s electronic payments system.
“The only message you can infer is it is time for state lawmakers to stop their efforts to bring credit card chaos to their consumers, small businesses, community banks and credit unions,” said Electronic Payments Coalition Executive Chairman Richard Hunt. “Electronic payments do not stop at state lines, and a patchwork of conflicting state mandates creates confusion, higher compliance costs and an uneven playing field.
“The FDIC’s proposal is an important step, but it cannot protect a state’s own community banks, small businesses and consumers from misguided mandates passed by their own state legislature.
“Illinois should be a cautionary tale for every state considering similar mandates. These policies reward out-of-state corporate mega-stores, trying to once-again change the rules to pad their profits, while creating uncertainty and unintended consequences for consumers and small businesses, community banks and credit unions on Main Street.”
The FDIC proposal is an important step toward addressing the uneven regulatory environment created by state-specific banking and payment mandates. But it does not solve the underlying problem. While the proposal could protect certain out-of-state, state-chartered banks from another state’s laws, community banks chartered in the state imposing the mandate could still be forced to comply.
The proposal follows action earlier this year by the Office of the Comptroller of the Currency addressing the application of Illinois’ Interchange Fee Prohibition Act to national banks. Together, these federal actions underscore the regulatory uncertainty and unequal treatment created when individual states attempt to impose their own rules on a national payments system.
