Payment Radar
OCC Attempts to Invalidate Illinois Swipe Fee Law, NRA Warns of Higher Costs
The Office of the Comptroller of the Currency (OCC) issued an interim final order to invalidate an Illinois law that would have limited swipe fees for restaurant operators, according to the National Restaurant Association.
What changed
The Office of the Comptroller of the Currency (OCC) issued an interim final order attempting to invalidate an Illinois law that would have made swipe fees more affordable for restaurant operators on passthrough dollars like taxes and tips. The OCC is also seeking to amend the National Bank Act to prevent states from enacting similar legislation to protect businesses from rising credit card interchange fees on these passthrough dollars. The National Restaurant Association argues this action prevents Illinois businesses from saving more than $507 million and enables coordinated price-fixing by the largest banks and credit card companies. The association states that U.S. interchange fees average 2–4% per transaction, costing business owners more than $198 billion annually, and that these fees often represent one of the highest costs for restaurant owners, trailing only food and labor. The National Restaurant Association calls on the Trump Administration to retract the rules and urges Congress to pass the Credit Card Competition Act to open the processing ecosystem to competition.
Why a business should care
The OCC’s attempted invalidation directly impacts the cost of accepting credit cards for restaurant operators by blocking state-level protections. The National Restaurant Association highlights that swipe fees are a significant expense for restaurants, often trailing only food and labor costs. The order prevents potential savings for Illinois businesses and may influence other states considering similar legislation. The association’s call for federal competition legislation underscores the ongoing impact of interchange fees on merchant operations.
Who it affects
Restaurant operators in the United States, particularly those in Illinois, are affected by the OCC’s attempt to invalidate state-level swipe fee protections.
What to consider doing
Pull your current month’s payment processor statements and calculate the exact percentage charged per transaction.
Uncertainty and risks
The National Restaurant Association argues the OCC’s rules enable coordinated price-fixing by the largest banks and credit card companies, which could lead to higher and non-negotiable fees for merchants. The association states that the current system shields card networks from market competition and local oversight, potentially increasing costs for business owners and consumers.
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