Preemption of Illinois Interchange Fee Prohibition Act: Interim Final Order

Impact. This OCC preemption order nullifies Illinois state restrictions on interchange fees for national banks and federal savings associations, restoring your institution's ability to set interchange fees according to federal standards rather than state limitations. Your Illinois operations can now align interchange fee structures with your broader national pricing strategy without concern for state-specific prohibitions.

Risk. The primary exposure lies in continuing to operate under the now-preempted Illinois restrictions, which could disadvantage your competitive position and leave revenue on the table. Examination teams will expect you to demonstrate awareness of the preemption and appropriate adjustments to pricing and compliance frameworks for Illinois customers.

Recommended Action. Legal counsel should immediately review your current Illinois interchange fee practices and confirm alignment with federal standards rather than the preempted state law. Update your state law compliance matrix to reflect this preemption and assess whether your current fee structures for Illinois customers should be adjusted to match federal parameters.

Watch. Monitor for any Illinois state response or legal challenges to this preemption order, which could create temporary uncertainty about the regulatory landscape. Track whether other states introduce similar interchange fee restrictions that might trigger additional federal preemption actions.