On June 12, the industry plaintiffs in the litigation challenging the Illinois Interchange Fee Prohibition Act (IFPA) moved the U.S. District Court for the Northern District of Illinois to reconsider in part its denial of summary judgment, arguing that the NCUA’s June 9 interim final rule (previously covered by InfoBytes here) constitutes an “intervening change in controlling law” relevant to whether the Federal Credit Union Act (FCUA) preempts the IFPA’s Interchange Fee Prohibition as applied to federal credit unions. The NCUA’s interim final rule purports to clarify federal credit unions’ authority to charge non-interest charges and fees, including interchange fees, even when such fees are set by or in consultation with third parties. As previously covered by InfoBytes, the court’s June 1 remand decision held that the IFPA’s Interchange Fee Prohibition is preempted as applied to national banks, federal savings associations and out-of-state state banks, but did not revisit whether the FCUA preempts the provision as applied to federal credit unions.

The plaintiffs argue that reconsideration is warranted because the NCUA rule bears directly on the FCUA preemption issue and ask the court to reconsider its June 1 conclusion that the FCUA does not preempt the Interchange Fee Prohibition. The motion states that the Illinois attorney general opposes additional relief under the FCUA, but that affording the court the opportunity to address the rule before the case returns to the 7th Circuit would promote efficiency and avoid “piecemeal” litigation. The plaintiffs proposed that each side file a brief of no more than five pages by June 18, limited to the effect of the NCUA rule.