On April 24, the OCC issued an interim final rule and an interim final order related to the Illinois Interchange Fee Prohibition Act (IFPA), which bans interchange fees on the tax or gratuity portions of a transaction and imposes restrictions on the use of data obtained as part of card transactions. The IFPA is scheduled to take effect on July 1, and both the interim final rule and interim final order are scheduled to take effect one day earlier, on June 30. As previously covered by InfoBytes, the OCC submitted the actions to the OMB for review on April 14 while ongoing litigation challenging the IFPA, in which the OCC has participated (covered by InfoBytes here), remains on appeal before the 7th Circuit.

Following these actions, the OCC filed a supplemental amicus brief in the appeal on April 28, notifying the court of the actions, which the OCC described as issued “under its congressionally delegated authority,” asserting the actions have “the force and effect of law” and “significant effects on the questions presented in this matter.” Subsequently, on April 29, the plaintiffs moved for leave to file supplemental briefing addressing the OCC’s actions, and the court granted the motion, ordering the parties to file simultaneous supplemental briefing by May 6 — one week before oral argument scheduled for May 13.

The interim final rule amends 12 CFR 7.4002 to clarify that national banks have broad authority under the National Bank Act to charge non-interest charges and fees, including interchange fees from credit and debit card operations, even when such fees are set by or in consultation with third parties such as card networks. The interim final order concludes that the National Bank Act and the Home Owners Loan Act preempt both the IFPA’s interchange fee prohibition and its data use limitations with respect to national banks and federal savings associations, respectively, which the OCC stated are neither subject to nor required to comply with the statute.

The OCC issued both actions without prior notice and comment, citing the IFPA’s imminent July 1 effective date and the purported regulatory confusion created by a February 2026 district court decision that reversed a prior preliminary injunction and found that federal law did not preempt the IFPA’s interchange fee prohibition (covered by InfoBytes here). The OCC stated that the amendments to 12 CFR 7.4002 reaffirm what it views as “preexisting” and “longstanding” national bank powers, and are intended to resolve ambiguity created by that ruling, which found the “thrust” of the regulation was “not to protect fees centrally established by a third-party company.” In its preemption order, the OCC applied the Barnett Bank “prevents or significantly interferes” standard as reaffirmed in Cantero v. Bank of America and concluded that the IFPA interferes with critical flexibility granted to national banks, impairs their efficient and effective exercise of deposit-taking and lending powers, and qualifies a federal power in an unusual way.

The OCC noted that the IFPA could expose payment card system participants to as much as $6.5 trillion in annual liability and could cause national banks to take drastic actions, including ceasing to issue payment cards or declining payment card transactions in Illinois. The OCC also warned that other states could enact similar or differing laws governing interchange fees and transaction data, creating a “fractured patchwork” that the OCC contends “would undermine the uniformity necessary for the functioning of the nation’s payment card systems.”