Rule2026-08328
National Bank Non-Interest Charges and Fees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 29, 2026
Effective
June 30, 2026
Issuing agencies
Treasury DepartmentComptroller of the Currency
Abstract
The OCC is adopting an interim final rule to clarify that national banks' power to charge non-interest charges and fees includes the power to assess, collect, impose, levy, receive, reserve, take, or otherwise obtain non-interest charges and fees, including interchange fees from credit and debit card operations. Further, the interim final rule explains that national banks may charge non-interest charges or fees, even when such charges and fees are set by or in consultation with third parties. The OCC invites public comments on this interim final rule.
Full Text
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<title>Federal Register, Volume 91 Issue 82 (Wednesday, April 29, 2026)</title>
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[Federal Register Volume 91, Number 82 (Wednesday, April 29, 2026)]
[Rules and Regulations]
[Pages 22989-22995]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-08328]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 7
[Docket ID OCC-2026-0430]
RIN 1557-AF54
National Bank Non-Interest Charges and Fees
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Interim final rule; request for comments.
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SUMMARY: The OCC is adopting an interim final rule to clarify that
national banks' power to charge non-interest charges and fees includes
the power to assess, collect, impose, levy, receive, reserve, take, or
otherwise obtain non-interest charges and fees, including interchange
fees from credit and debit card operations. Further, the interim final
rule explains that national banks may charge non-interest charges or
fees, even when such charges and fees are set by or in consultation
with third parties. The OCC invites public comments on this interim
final rule.
DATES: The interim final rule is effective June 30, 2026. Comments on
the interim final rule must be received on or before May 29, 2026.
ADDRESSES: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal. Please use the title ``National Bank Non-
Interest Charges and Fees'' to facilitate the organization and
distribution of the comments. You may submit comments by any of the
following methods:
<bullet> Federal eRulemaking Portal--``<a href="http://Regulations.gov">Regulations.gov</a>'':
Go to <a href="https://regulations.gov/">https://regulations.gov/</a>. Enter Docket ID ``OCC-2026-0430''
in the Search Box and click ``Search.'' Public comments can be
submitted via the ``Comment'' box below the displayed document
information or by clicking on the document title and then clicking the
``Comment'' box on the top-left side of the screen. For help with
submitting effective comments, please click on ``Commenter's
Checklist.'' For assistance with the <a href="http://Regulations.gov">Regulations.gov</a> site, please call
1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. ET, or email
<a href="/cdn-cgi/l/email-protection#26544341534a47524f4948554e434a564243554d6641554708414950"><span class="__cf_email__" data-cfemail="d1a3b4b6a4bdb0a5b8bebfa2b9b4bda1b5b4a2ba91b6a2b0ffb6bea7">[email protected]</span></a>.
<bullet> Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, 400 7th Street
SW, Suite 3E-218, Washington, DC 20219.
[[Page 22990]]
<bullet> Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
Instructions: You must include ``OCC'' as the agency name and
Docket ID ``OCC-2026-0430'' in your comment. In general, the OCC will
enter all comments received into the docket and publish the comments on
the <a href="http://Regulations.gov">Regulations.gov</a> website without change, including any business or
personal information provided such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this action by the following method:
<bullet> Viewing Comments Electronically--<a href="http://Regulations.gov">Regulations.gov</a>:
Go to <a href="https://regulations.gov/">https://regulations.gov/</a>. Enter Docket ID ``OCC-2026-0430''
in the Search Box and click ``Search.'' Click on the ``Dockets'' tab
and then the document's title. After clicking the document's title,
click the ``Browse All Comments'' tab. Comments can be viewed and
filtered by clicking on the ``Sort By'' drop-down on the right side of
the screen or the ``Refine Comments Results'' options on the left side
of the screen. Supporting materials can be viewed by clicking on the
``Browse Documents'' tab. Click on the ``Sort By'' drop-down on the
right side of the screen or the ``Refine Results'' options on the left
side of the screen checking the ``Supporting & Related Material''
checkbox. For assistance with the <a href="http://Regulations.gov">Regulations.gov</a> site, please call 1-
866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. ET, or email
<a href="/cdn-cgi/l/email-protection#4f3d2a283a232e3b2620213c272a233f2b2a3c240f283c2e61282039"><span class="__cf_email__" data-cfemail="64160103110805100d0b0a170c0108140001170f240317054a030b12">[email protected]</span></a>.
The docket may be viewed after the close of the comment period in
the same manner as during the comment period.
FOR FURTHER INFORMATION CONTACT: Karen McSweeney, Special Counsel,
Priscilla Benner, Counsel, and Elizabeth Small, Counsel, Chief
Counsel's Office, 202-649-5490; Office of the Comptroller of the
Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf,
hard of hearing or have a speech disability, please dial 7-1-1 to
access telecommunications relay services.
SUPPLEMENTARY INFORMATION:
I. Introduction
In the National Bank Act (NBA), Congress granted national banks
enumerated powers, including to ``loan[ ] money on personal security''
and to ``receiv[e] deposits,'' as well as ``all such incidental powers
as shall be necessary to carry on the business of banking.'' \1\ As the
OCC and courts have long recognized, national banks thus have broad
powers to engage in activities that are part of, or incidental to, the
business of banking, including issuing debit cards and credit cards
(payment cards) and processing payments.\2\
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\1\ 12 U.S.C. 24 (Seventh).
\2\ See, e.g., OCC Conditional Approval No. 773, 2006 WL
4589434, at *1 (Nov. 30, 2006) (``[M]erchant processing activities
are part of, or incidental to, the business of banking[.]''); OCC
Corporate Decision 99-50, at 4 (Dec. 23, 1999) (``processing credit
and debit card transactions and other electronic payments are
clearly part of the business of banking''), <a href="https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2000/cd99-50.pdf">https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2000/cd99-50.pdf</a>; OCC Conditional Approval No. 248, at 4 (June 27, 1997) (``It
is clear that merchant processing activities are permissible for
national banks[.]''), <a href="https://www.occ.gov/topics/chartersand-licensing/interpretations-and-actions/1997/ca248.pdf">https://www.occ.gov/topics/chartersand-licensing/interpretations-and-actions/1997/ca248.pdf</a>.
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National banks also have the authority to receive compensation for
the products and services they provide, including to charge and receive
interchange fees \3\ for processing payment card transactions.\4\
Specifically, 12 CFR 7.4002, which implements the NBA, sets out
national banks' broad authority to impose non-interest charges and fees
and provides each national bank with the discretion to make business
decisions about how to impose these charges and fees.\5\
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\3\ An ``interchange fee'' is generally the fee paid to an
issuer bank as part of a payment card transaction.
\4\ 12 CFR 7.4002. With respect to Federal savings associations,
12 CFR 145.17 authorizes Federal savings associations ``to transfer,
with or without fee, its customers' funds.'' This interim final rule
does not address savings associations because we interpret Federal
law, including Sec. 145.17, to clearly provide Federal savings
associations with comparable authority.
\5\ See Baptista v. JPMorgan Chase Bank, N.A., 640 F.3d 1194,
1198 & n.2 (11th Cir. 2011) (concluding that ``the OCC specifically
authorizes banks to charge fees to non-accountholders presenting
checks for payment'' and ``the significant objective of 12 CFR
7.4002 is to allow national banks to charge fees and to allow banks
latitude to decide how to charge them''); Monroe Retail, Inc. v. RBS
Citizens, N.A., 589 F.3d 274, 283-84 (6th Cir. 2009) (agreeing that
a national bank is authorized by 12 CFR 7.4002 and 12 U.S.C. 24
(Seventh) to ``exact[ ]'' or ``collect'' garnishment fees by
debiting a depositor); Bank of Am. v. City & Cnty. of S.F., 309 F.3d
551, 5624 (9th Cir. 2002) (holding that, consistent with OCC
regulations including 12 CFR 7.4002, ``national banks may charge ATM
fees to non-depositors'').
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Recently, a Federal district court in the Northern District of
Illinois created ambiguity about the scope of Sec. 7.4002, asserting
that national banks do not ``set'' interchange fees and finding that
``[t]he thrust of 12 CFR 7.4002 is not to protect fees centrally
established by a third-party company.'' \6\ Such a finding is, however,
inapposite to the OCC and courts' longstanding interpretation of Sec.
7.4002 and fails to recognize the reality of the payment card systems
and the modern economy. The OCC is issuing this interim final rule to
clarify the scope of this national bank power.
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\6\ Ill. Bankers Ass'n v. Raoul,---F. Supp. 3d---, 2026 WL
371196, at *9, *13 (N.D. Ill. Feb. 10, 2026) (``Raoul SJ opinion'').
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National banks routinely rely on third parties for a range of
products and services.\7\ In particular, third parties are crucial to
national banks' provision of payment cards, which are vital and deeply
rooted components of the American and global economy. These cards are
among the most universally accepted and common methods of payment and
are routinely used by millions of consumers to pay for products and
services worldwide.\8\
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\7\ See, e.g., Request for Information Regarding Community
Banks' Engagement with Core Service Providers and Other Essential
Third-Party Service Providers, 90 FR 54882 (Nov. 28, 2025)
(discussing community banks' reliance on third parties to operate
effectively and competitively).
\8\ OCC, Comptroller's Handbook, ``Credit Card Lending,'' 1
(2021). See also Berhan Bayeh et al., Fed. Reserve Fin. Servs., 2025
Findings from the Diary of Consumer Payment Choice 5 (2025) (finding
that, in 2024, credit and debit cards were used for approximately 65
percent of consumer payments).
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National banks serve essential roles within card networks, which
are a crucial means of exercising their statutory deposit-taking and
lending powers. National banks contract with card networks (e.g., Visa
and Mastercard) and others to facilitate payment card transactions. As
the issuers of credit and debit cards, they provide payment cards to
customers, assess cardholder risk, and offer services including fraud
detection and prevention, dispute resolution, and rewards programs. As
acquirers, they contract with merchants who accept payment cards and
connect these merchants to the card network so that transactions are
seamlessly processed and settled.
As compensation, national banks are paid fees for their payment
card services. These fees, which include interchange fees, compensate
these institutions for the costs of their participation, incentivize
their provision of services and continued participation in the network,
and enable enhancements, such as fraud detection and prevention,
rewards programs, and technology upgrades.
[[Page 22991]]
National banks could engage in bilateral negotiations with myriad
merchants and other banks involved in processing payment card
transactions to establish the terms of this activity, including
fees.\9\ Given the global nature of payment card systems, however, such
a process would be complex, inefficient, ineffective, and costly.
Moreover, most national banks do not have the resources to engage in
such activities. Accordingly, most national banks agree to the
interchange fees set by the card networks. The NBA clearly permits
national banks to make this decision, along with decisions about the
payment card services to offer, the card networks with which to
contract, and the terms of the agreements. Therefore, the applicability
of Sec. 7.4002 should not be read to change simply because a third
party has a role in setting the non-interest charges and fees.
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\9\ A national bank may also establish a proprietary card
network. See, e.g., OCC, Comptroller's Handbook, ``Payment
Systems,'' 14 (2021).
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II. Description of the Proposed Rule
Although the OCC believes that Sec. 7.4002 already allows national
banks to impose fees that are set by a third party, the OCC is revising
Sec. 7.4002 to make that explicit and resolve any uncertainty about
the scope of the regulation. The OCC is also revising Sec. 7.4002 to
specifically include interchange fees as a type of non-interest charge
or fee national banks may impose.
Defining ``Charge''
Some of the confusion about the scope of Sec. 7.4002 appears to be
related to the lack of clarity about what it means for a national bank
to ``charge . . . non-interest charges and fees.'' Accordingly, the OCC
is adding a definition of ``charge'' to paragraph (a) of Sec. 7.4002
and moving the authority to impose non-interest charges and fees to
paragraph (b) of the section. This definition clarifies that charge
means to assess, collect, impose, levy, receive, reserve, take, or
otherwise obtain, including through a fee sharing or similar economic
relationship. This definition also clarifies that national banks may
take such actions directly or through intermediaries, partners, payment
networks, interchanges, or other third parties. These amendments are
intended to encompass various means by which a national bank may obtain
non-interest compensation for providing a product or service,
regardless of which entity sets the amount of the non-interest charge
or fee or exactly how the national bank obtains the charge or fee.\10\
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\10\ See Fawcett v. Citizens Bank, N.A., 919 F.3d 133, 138 (1st
Cir. 2019) (``[U]nder OCC's regulations, a charge is either
`interest' or it is a `non-interest charge[ ],' which includes
`deposit account service charges.' '') (alteration in original)
(quoting 12 CFR 7.4002(a)).
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Removing ``Customer''
The OCC is also amending the authority to impose non-interest
charges and fees, now redesignated as paragraph (b) of Sec. 7.4002, to
remove the word ``customer.'' As reflected in the new definition of
``charge,'' the purpose of revised Sec. 7.4002 is to clearly
articulate national banks' power to receive non-interest compensation
for providing products or services, regardless of whether that
compensation comes directly from the individual or entity receiving the
product or service or via a third party that may not have a
``customer'' relationship with the bank.
Adding Interchanges Fees as an Example
Current Sec. 7.4002 contains only one example of the types of non-
interest charges and fees national banks can impose--deposit account
service charges. Although previous iterations of Sec. 7.4002 contained
additional examples of non-interest charges and fees, the OCC generally
removed the examples in 2001, noting that ``explicit reference to the .
. . types of fees is unnecessary and could be misinterpreted as a
limitation on a national bank's ability to charge other types of
fees.'' \11\ Given recent confusion, however, the OCC is adding
interchange fees as another nonexclusive example of the charges and
fees covered by Sec. 7.4002 to provide additional clarity. The agency
continues to emphasize, however, that the inclusion of this example
does not imply the exclusion of other non-interest charges and
fees.\12\
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\11\ See Investment Securities; Bank Activities and Operations;
Leasing, 66 FR 34784, 34787 (July 2, 2001) (finalizing the removal
of the examples of dormant account fees and fees for credit reports
and investigations from Sec. 7.4002).
\12\ Additionally, this amendment will make clearer that Sec.
7.4002 permits national banks to charge non-interest charges and
fees related to both debit and credit accounts. In 1995, the OCC
proposed stating in Sec. 7.4002(a) that ``a national bank may
charge its customers deposit account service charges and loan-
related fees.'' Interpretive Rulings, 60 FR 11924, 11940 (Mar. 3,
1995) (emphasis added). The final rule removed the reference to
``loan-related fees'' in response to comments that asked the OCC to
clarify that the proposed phrase did not include interest governed
by Sec. 7.4001. Interpretive Rulings, 61 FR 4849, 4859 (Feb. 9,
1996). Although this change did not reflect a determination that
7.4002 was inapplicable to credit accounts, additional clarity in
Sec. 7.4002 regarding non-interest charges and fees related to both
credit and debit accounts should be helpful. In addition, the
distinction between interest and non-interest charges and fees is
still addressed by paragraph (d) (as redesignated) of Sec. 7.4002.
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The Role of Third Parties in Setting Non-Interest Charges and Fees
The OCC is also amending several parts of newly redesignated
paragraph (c)(2) of Sec. 7.4002 to explicitly include scenarios where
non-interest charges or fees may be set by, or in conjunction with,
third parties. The existing paragraph (b)(2) provides that the
establishment of non-interest charges and fees, their amounts, and the
method of calculating them are business decisions to be made by each
national bank, in its discretion, according to sound banking judgment
and safe and sound banking principles. This paragraph also describes
the factors a national bank considers when making the business decision
to establish non-interest charges and fees in accordance with safe and
sound banking principles. This interim final rule amends this paragraph
to make explicit that a national bank's choices regarding charging non-
interest charges and fees, including whether to enter into business
relationships or lines of business or charge fees set by or in
consultation with third parties, are also business decisions to be made
by each bank, in its discretion according to sound banking judgment and
safe and sound banking principles. These amendments also clarify that
the factors a national bank considers include the use of third parties
to provide or facilitate the provision of a product or service. The
amendments reflect the reality of the modern financial system and
global economy, where products and services may be more efficiently and
effectively provided through the use of third parties, which may also
make or influence decisions regarding pricing.
The OCC is also making conforming edits to paragraph (c)(1) of
Sec. 7.4002 to clarify that it applies to the business decisions a
national bank makes regarding non-interest charges and fees. Consistent
with this provision and applicable antitrust law, national banks are
prohibited from engaging in illegal anticompetitive conduct in making
business decisions regarding non-interest charges and fees.\13\
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\13\ The OCC is also making other nonsubstantive technical and
clarifying edits to Sec. 7.4002.
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III. Regulatory Analysis
A. Administrative Procedure Act
The OCC is issuing this interim final rule without prior notice and
the opportunity for public comment that are ordinarily prescribed by
the
[[Page 22992]]
Administrative Procedure Act (APA).\14\ Pursuant to 5 U.S.C. 553(b)(B),
general notice and the opportunity for public comment are not required
with respect to a rulemaking when an ``agency for good cause finds (and
incorporates the finding and a brief statement of reasons therefor in
the rules issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest.''
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\14\ 5 U.S.C. 553.
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The OCC has found that prior notice and public comment are
impracticable for this interim final rule due to the regulatory
confusion created by the February 2026, Raoul SJ opinion, which found
that Federal law does not preempt a key provision of the Illinois
Interchange Fee Prohibition Act (IFPA),\15\ and the potential
consequences of such confusion. In the Raoul SJ opinion, the district
court removed its December 2024 preliminary injunction of the IFPA as
applied to national banks and other depository institutions.\16\ The
court's analysis in the Raoul SJ opinion was based, in part, on a
misunderstanding of the NBA and Sec. 7.4002. As a result, absent this
interim final rule, there likely will be significant uncertainty as to
whether national banks are required to comply with the IFPA by July 1,
2026.
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\15\ 815 Ill. Comp. Stat. 151/150.
\16\ See also Ill. Bankers Ass'n v. Raoul, 760 F. Supp. 3d 636,
657 (N.D. Ill. 2024) (issuing a preliminary injunction of IFPA in
the same matter, finding that the Illinois Bankers Association was
``likely to prevail on the merits of their claim that the IFPA's
Interchange Fee Prohibition violates the federal rights of national
banks and is preempted by the NBA under the Barnett Bank
standard'').
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As explained below, the IFPA creates a complex and potentially
unworkable standard, and it imposes significant potential liability for
non-compliance. Therefore, national banks may take drastic actions to
avoid these risks, up to and including declining payment card
transactions subject to the IFPA.\17\ Given the complexity of the
payment card systems and the modern economy, these effects may not be
limited to Illinois.
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\17\ E.g., Letter from H. Carney, Exec. Vice President, Fin.
Inst. Pol'y & Regul. Affs., Am. Bankers Ass'n, to W. Giles,
Principal Deputy Chief Couns., OCC 3 (Mar. 30, 2026) (``ABA
Letter'') (``We are also hearing that some issuing financial
institutions--particularly smaller and mid-sized banks--are
concluding that the IFPA's risks and costs are too great, and have
indicated they may simply cease issuing credit or debit cards to
their customers, while also exploring options for declining card
transactions in Illinois.'').
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For national banks that choose to continue to support these payment
card transactions, the OCC understands that these banks will need to
inform customers, in advance of the IFPA's July 1, 2026 effective date,
that the terms and conditions of their payment cards may soon
change.\18\ The OCC also understands that national banks will need to
inform merchants about possible changes, including updates to how they
process payments, the need for new software or hardware, or that some
transactions may be declined.\19\ These communications, as well as the
potential for national banks to stop supporting covered payment card
transactions, may generate significant customer and merchant confusion
about whether, or how, payment cards will work after the IFPA's
effective date. These potential actions may cause doubt about continued
access to basic lending and deposit services, which could lead to
economic harm and disruption and pose significant risks to the safety
and soundness of national banks and the national banking system as a
whole.
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\18\ Id.
\19\ Id.
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In light of these potential consequences, the OCC, for good cause,
finds that advance notice and comment is impracticable and is issuing
this interim final rule. This rule will provide certainty that the IFPA
is preempted with respect to national banks before it goes into effect
and therefore help prevent the imminent negative effects of the IFPA's
application to national banks. Given the importance of this issue,
however, the OCC invites public comment on all aspects of this interim
final rule and intends to issue a final rule as soon as possible after
the close of the comment period and sufficient time to consider and
address comments.
Background
In the modern economy, millions of customers and merchants
worldwide rely on payment cards every day, including an estimated 1.3
million merchants in Illinois.\20\ As discussed above, national banks
serve an essential function in the U.S. payment card systems.\21\ A
significant disruption of these payment networks could cause
substantial economic harm.
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\20\ See U.S. Small Bus. Admin., 2024 Small Business Profile:
Illinois (reporting 1.4 million small businesses, representing 99.6%
of all Illinois businesses); Clearly Payments, How Many Businesses
in the US and Canada Accept Credit Cards in 2025 (2025) (estimating
that approximately 94 percent of U.S. and Canadian merchants accept
payment cards).
\21\ Any payment cardholders could make purchases subject to the
IFPA, such as when traveling to Illinois or shopping online.
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On June 7, 2024, Illinois enacted the IFPA, which, among other
things, prohibits card issuer banks, card networks, acquirer banks, and
other participants from receiving or charging a merchant an interchange
fee on the tax or gratuity amount of a payment card transaction.\22\
This prohibition, known as the interchange fee prohibition, applies if
the merchant informs the acquirer of the tax or gratuity amount as part
of the authorization or settlement of the transaction (automatic
process).\23\ Alternatively, the merchant has 180 days to transmit the
relevant documentation (e.g., paper receipts) to the acquirer bank,
after which the issuer has 30 days to credit the merchant for any
interchange fee charged on the tax or gratuity amount (manual
process).\24\ Violations of the interchange fee prohibition carry a
civil penalty of $1,000 per transaction.\25\ The IFPA goes into effect
on July 1, 2026.
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\22\ 815 Ill. Comp. Stat. 151/150-10(a). The IFPA defines an
interchange fee as ``a fee established, charged, or received by a
payment card network for the purpose of compensating the issuer for
its involvement in an electronic payment transaction.'' Id. at 151/
150-5.
\23\ Id. at 151/150-10(a).
\24\ Id. at 151/150-10(b).
\25\ Id. at 151/150-15(a).
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In August 2024, the Illinois Credit Union League, Illinois Bankers
Association, America's Credit Unions, and American Bankers Association
(collectively, IBA) sought to enjoin the IFPA.\26\ On December 20,
2024, the district court for the Northern District of Illinois granted
a preliminary injunction as applied to national banks.\27\ In February
2026, however, approximately four months before the IFPA's effective
date, the district court reversed course. It found that the interchange
fee prohibition was not preempted by federal law, reasoning that
``[t]he thrust of 12 CFR 7.4002 is not to protect fees centrally
established by a third-party company.'' \28\
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\26\ Compl. for Decl. & Inj. Relief, Ill. Bankers Ass'n v.
Raoul, No. 24-cv-07307 (N.D. Ill. Aug. 15, 2024); Pl.'s Mot. for
Prelim. Inj., Ill. Bankers Ass'n v. Raoul, No. 24-cv-07307 (N.D.
Ill. Aug. 21, 2024).
\27\ Ill. Bankers Ass'n v. Raoul, 760 F.Supp.3d. 636.
\28\ Raoul SJ opinion, supra, 2026 WL 371196, at *13.
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IFPA's Application to National Banks
The OCC understands that current payment card infrastructure does
not support the IFPA's automatic process and cannot be updated by the
IFPA's effective date.\29\ To implement this process would appear to
require, at a minimum: (1) the card networks to develop new
technological and standards changes in coordination with relevant U.S.
and international standards bodies; (2) acquirer and issuer banks to
implement these changes; and
[[Page 22993]]
(3) merchants to develop and adopt systems to transmit the requisite
information at the point of sale.\30\ Such changes likely would entail
lengthy and careful planning because implementation glitches or
failures could disrupt global payment card systems or create
opportunities for fraud or misuse.\31\
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\29\ See id. at 14 (``It is an open question whether the
transaction process could adapt to the impact of the IFPA in
time.''); see also ABA Letter, supra, at 3.
\30\ Declaration of Chiro Aikat ]] 33-40, Ill. Bankers Ass'n v.
Raoul, No. 24-cv-07307 (N.D. Ill. Aug. 21, 2024) (Decl. C. Aikat);
Declaration of Dierdre P. Cohen ]] 6-7, 20-26, Ill. Bankers Ass'n v.
Raoul, No. 24-cv-07307 (N.D. Ill. Aug. 21, 2024) (``Decl. D.
Cohen'').
\31\ Decl. D. Cohen, supra, ] 26.
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As an alternative, certain merchants may invoke IFPA's manual
process by submitting tax documentation. It is unclear, however, how
this process could be implemented. Acquirer national banks may not be
able to identify the issuer national bank in a given transaction.\32\
Even if identification were possible, there is generally no mechanism
for direct communication between these banks.\33\ Furthermore, based on
the broad definition of tax documentation, which includes ``invoices,
receipts, journals, ledgers, and tax returns,'' an issuer bank may not
be able to reliably identify the tax and gratuity amount for each
transaction or calculate the corresponding interchange fee credit.\34\
Even if each of these hurdles could be overcome, building new systems
and hiring staff to facilitate this highly manual process would require
time to develop and test.\35\
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\32\ See Decl. C. Aikat, supra, ] 43 (``The statute's text seems
to contemplate that the information that a merchant possesses, such
as what it can identify from receipt or ledger, specifying the
amount of tax and gratuity, will be sufficient for the acquiring
bank to determine which issuing bank was involved in the
transaction. In nearly all circumstances, however, that will not be
true. This is because modern payment card transaction receipts
include only a truncated payment card number, specifically the last
four digits of the 16-digit payment card number, to minimize the
risk of payment card number theft (and as specifically permitted by
applicable banking law). But the issuer of a payment card is not
identifiable from the last four digits. Rather, it is the first six
digits of a payment card number that identify the issuing bank.'').
\33\ See Declaration of Raju Sitaula ] 20, Ill. Bankers Ass'n v.
Raoul, No. 24-cv-07307 (N.D. Ill. Aug. 21, 2024) (``Decl. R.
Sitaula'').
\34\ 815 ILCS 151/150-5.
\35\ Decl. R. Sitaula, supra, ] 26.
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Despite the complex and potentially unworkable nature of the
interchange fee prohibition, the IFPA exposes national banks to
penalties of $1,000 per transaction for failing to comply with its
provisions.\36\ Given the upwards of 6.5 billion payment card
transactions that occur yearly in Illinois, participants in the payment
card systems could be subject to as much as $6.5 trillion in liability
per year for non-compliance with IFPA.\37\ The potential liability
could pose significant risk to a national bank's safety and soundness
as well as the national banking system.
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\36\ 815 ILCS 151/150-15(a).
\37\ See Federal Reserve, Federal Reserve Payments Study, 2024
Accessible Version of Trends in Noncash Payments (March 6, 2025);
U.S. Bureau of Economic Analysis (BEA), SQGDP1 State Quarterly Gross
Domestic Product Summary (accessed Thursday, April 9, 2026). The
number of payment card transactions in Illinois was estimated by
aggregating the estimated number of 2022 card transactions in the
United States as reported in the Federal Reserve Payment Study's
2024 Accessible Version of Trends in Noncash Payments and
multiplying by 3.9 percent, which is Illinois's share of the current
United States dollar Gross Domestic Product in 2025 according to the
BEA.
Note that each party in a single transaction seemingly could be
subject to the $1,000 fine, so the total fines attributable to one
transaction could be more than $1,000.
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In light of the above, the card networks and banks may seek to
mitigate their liability, for example, by advising merchants in
Illinois not to accept payment cards for tax and gratuity, attempting
to decline certain classes of transactions (e.g., purchases of
gasoline, where excise tax is imbedded in the product's price),\38\ or
denying payment card transactions originating in Illinois or
elsewhere.\39\ Some smaller banks may even be forced to stop offering
payment cards altogether.\40\ Some have stated that compliance with the
IFPA could lead to ``potentially business-ending consequences'' for
some participants.\41\
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\38\ Since the excise tax is included in the price of gas in
Illinois and varies by grade of fuel, it may be impossible for
merchants to transmit only the cost of the fuel and not the excise
tax.
\39\ See ABA Letter, supra. Currently, the data provided to the
payment card network as a part of an electronic transaction includes
the physical location of the merchant. However, that data may
reflect the merchant's headquarters or other location and not the
location where the transaction occurred. Further, for online
purchases, determining where the purchase took place is even
trickier and that information is also not currently conveyed through
the payment card networks. Decl. D. Cohen, supra, ] 25. As a result,
blocking every transaction subject to the IFPA, and only those
transactions, may be technically difficult to achieve. Such efforts
may result in transactions that are not subject to IFPA being
blocked, e.g., a transaction that occurs in Indiana, but where a
merchant's payment card terminal reflects its headquarters location
in Illinois.
\40\ Declaration of Rick Francois ] 15, Ill. Bankers Ass'n v.
Raoul, No. 24-cv-07307 (N.D. Ill. Aug. 21, 2024) (``[The]manual
reimbursement solution as currently proposed under the legislation
creates an unsustainable burden on debit card issuers of our size.
If the debit card product becomes unprofitable for banks of our
size, they will be forced to consider no longer offering these cards
to their consumers. Not offering the debit card product would be
harmful not only to banks of our size, but to our consumer
clients.'').
\41\ Ill. Bankers Ass'n, 2026 WL 371196, at *6.
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The OCC understands that banks will need to communicate with
customers and other stakeholders about the effects of the IFPA,
including potential changes to the functionality of payment cards.\42\
As noted above, these communications may generate significant confusion
and doubt about access to basic lending and deposit services,
especially when combined with potential widespread and unpredictable
declinations of payment card transactions. This could lead to economic
harm and disruption and pose significant risks to the safety and
soundness of national banks and the national banking system as a whole.
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\42\ ABA Letter, supra, at 3.
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To avoid these potentially grave consequences, the OCC is acting by
interim final rule.
B. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA),\43\ the OCC may
not conduct or sponsor, and a respondent is not required to respond to,
an information collection unless it displays a currently valid Office
of Management and Budget (OMB) control number. The OCC has reviewed
this interim final rule and determined that it does not create any new
or revise any existing collections of information. Accordingly, no PRA
submissions to OMB will be made with respect to this interim final
rule.
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\43\ 44 U.S.C. 3501-21.
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C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \44\ requires an agency to
consider whether the rules it proposes will have a significant economic
impact on a substantial number of small entities.\45\ The RFA applies
only to rules for which an agency publishes a general notice of
proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed above,
consistent with Sec. 553(b)(B) of the APA, the OCC has determined for
good cause that general notice and opportunity for public comment is
impracticable and therefore is not issuing a notice of proposed
rulemaking. Accordingly, the RFA's requirements relating to initial and
final regulatory flexibility analysis do not apply to this interim
final rule.
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\44\ 5 U.S.C. 601 et seq.
\45\ Under regulations issued by the Small Business
Administration (SBA), as of June 2025, a small entity includes a
depository institution, bank holding company, or savings and loan
holding company with total assets of $850 million or less and trust
companies with total assets of $47 million or less. The SBA may
adjust these thresholds annually, so check the citation for the most
recent asset thresholds. See 13 CFR 121.201.
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However, the OCC evaluated whether the interim final rule will have
a significant economic impact on a substantial number of small
entities. The OCC currently supervises approximately 609 small
entities, of
[[Page 22994]]
which 420 are national banks that will be impacted by the interim final
rule.
In general, the OCC classifies the economic impact on an individual
small entity as significant if the total estimated impact in one year
is greater than 5 percent of the small entity's total annual salaries
and benefits or greater than 2.5 percent of the small entity's total
non-interest expense. Furthermore, the OCC considers 5 percent or more
of OCC-supervised small entities to be a substantial number. Thus, at
present, 30 OCC-supervised small entities would constitute a
substantial number. Therefore, since the interim final rule will affect
all 420 OCC-supervised national banks, a substantial number of OCC-
supervised small entities would be impacted.
However, the interim final rule imposes no new mandates, and thus
no direct costs, on affected OCC-supervised institutions. Therefore,
the OCC believes that the interim final rule will not have a
significant economic impact on a substantial number of small entities.
D. Unfunded Mandates Reform Act of 1995
As a general matter, the Unfunded Mandates Reform Act of 1995
(UMRA) requires the preparation of a budgetary impact statement before
promulgating a rule that includes a Federal mandate that may result in
the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year ($193 million as adjusted annually for inflation).\46\ However,
the UMRA does not apply to final rules for which a general notice of
proposed rulemaking was not published. As discussed above, consistent
with Sec. 553(b)(B) of the APA, the OCC has determined for good cause
that general notice and opportunity for public comment is impracticable
and therefore is not issuing a notice of proposed rulemaking. Moreover,
the OCC has analyzed the interim final rule under the factors in UMRA.
Because this interim final rule imposes no new mandates, it will not
require additional expenditure of $193 million or more annually by any
State, local, or tribal governments, in the aggregate, or by the
private sector. Accordingly, for these reasons, the OCC has not
prepared the written statement described in Sec. 202 of UMRA.
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\46\ 2 U.S.C. 1531 et seq.
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E. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to Sec. 302(a) of the Riegle Community Development and
Regulatory Improvement Act (RCDRIA) of 1994,\47\ in determining the
effective date and administrative compliance requirements for new
regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions, the OCC must consider,
consistent with principles of safety and soundness and the public
interest, (1) any administrative burdens that the final rule would
place on depository institutions, including small depository
institutions and customers of depository institutions and (2) the
benefits of the final rule. This rulemaking does not impose any
reporting, disclosure, or other requirements on insured depository
institutions. Therefore, Sec. 302(a) does not apply to this interim
final rule.
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\47\ 12 U.S.C. 4802(a).
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F. Executive Orders 12866 and 14192
Executive Order 12866 provides that the Office of Information and
Regulatory Affairs (OIRA) within OMB will review all ``significant
regulatory actions'' as defined therein. OIRA has determined that this
interim final rule is an economically significant regulatory action
under section 3(f)(1) of Executive Order 12866.
As discussed above and in the Supplementary Information section of
the OCC's concurrent interim final order finding that Federal law
preempts the IFPA (Preemption Order), the IFPA would impose substantial
costs on banks. This interim final rule clarifies the scope of national
banks' power to charge non-interest charges and fees. As explained in
the Preemption Order, the IFPA prevents or significantly interferes
with this power and is preempted with respect to national banks.
Therefore, this interim final rule, the effect of which is made clear
by the Preemption Order, will result in significant cost savings.
Executive Order 14192, titled ``Unleashing Prosperity Through
Deregulation,'' separately requires that an agency, unless prohibited
by law, identify at least 10 existing regulations to be repealed when
the agency publicly proposes for notice and comment or otherwise
promulgates a new regulation with total costs greater than zero.
Executive Order 14192 further requires that new incremental costs
associated with new regulations shall, to the extent permitted by law,
be offset by the elimination of existing costs associated with at least
ten prior regulations. The OCC has determined that the interim final
rule will be a deregulatory action under Executive Order 14192 because
it may provide legal clarity for affected OCC-supervised institutions.
G. Congressional Review Act
Before a rule can take effect, Subtitle E of the Small Business
Regulatory Enforcement Fairness Act of 1996 (also known as the
Congressional Review Act or CRA) \48\ provides that the OCC must submit
to Congress and to the Comptroller General the rule along with a report
indicating whether it is a ``major rule.'' In general, if a rule is a
``major rule,'' the CRA provides that the rule may not takes effect
until 60 days after Congress receives the required report or
publication of the rule in the Federal Register.\49\ The CRA defines a
``major rule'' as any rule that the Administrator of OIRA finds has
resulted in or is likely to result in (1) an annual effect on the
economy of $100,000,000; (2) a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies or geographic regions, or (3) a significant adverse effect on
competition, employment, investment, productivity, innovation, or the
ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets.\50\ OIRA has
determined that this interim final rule is a major rule.
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\48\ 5 U.S.C. 801 et seq.
\49\ 5 U.S.C. 801(a)(3).
\50\ 5 U.S.C. 804(2).
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The effective date of this interim final rule is June 30, 2026. As
required by the Congressional Review Act, the OCC will submit the
interim final rule and other appropriate reports to Congress and the
Government Accountability Office for review.
H. Providing Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023 \51\
requires that a notice of proposed rulemaking include the internet
address of a summary of not more than 100 words in length of a proposed
rule, in plain language, that shall be posted on the internet website
<a href="http://www.regulations.gov">www.regulations.gov</a>. While the OCC is not issuing a notice of proposed
rulemaking, a summary of this interim final rule can be found below and
at <a href="https://occ.gov/topics/laws-and-regulations/occ-regulations/proposed-issuances/index-proposed-issuances.html">https://occ.gov/topics/laws-and-regulations/occ-regulations/proposed-issuances/index-proposed-issuances.html</a>.
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\51\ 5 U.S.C. 553(b)(4).
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The OCC is adopting an interim final rule to clarify that national
banks' power to charge non-interest charges and fees includes the power
to assess, collect, impose, levy, receive, reserve, take, or otherwise
obtain non-interest
[[Page 22995]]
charges and fees, including interchange fees from credit and debit card
operations. Further, the interim final rule explains that national
banks may charge non-interest charges or fees, even when such charges
and fees are set by or in consultation with third parties. The OCC
invites public comments on this interim final rule.
List of Subjects in 12 CFR Part 7
Bonds, Computer technology, Credit, Insurance, Investments, Metals,
National banks, Reporting and recordkeeping requirements, Savings
associations, Securities, Surety bonds, Usury.
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Chapter I
Authority and Issuance
For the reasons set out in the preamble, the OCC amends part 12 of
chapter I of title 12 of the Code of Federal Regulations as follows:
PART 7--ACTIVITIES AND OPERATIONS
Subpart D--Preemption
0
1. The authority citation for part 7 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 25b, 29, 71, 71a, 92, 92a, 93,
93a, 95(b)(1), 371, 371d, 481, 484, 1462a, 1463, 1464, 1465, 1818,
1828, 3102(b), and 5412(b)(2)(B).
0
2. Revise and republish Sec. 7.4002 to read as follows:
Sec. 7.4002 National bank non-interest charges and fees.
(a) Definition. For the purposes of this section:
Charge means to directly or indirectly, through intermediaries,
partners, payment networks, interchanges, or other third parties,
assess, collect, impose, levy, receive, reserve, take, or otherwise
obtain, including through a fee sharing or similar economic
relationship.
(b) Authority to impose charges and fees. A national bank may
charge non-interest charges and fees, including deposit account service
charges and interchange fees from credit and debit card operations.
(c) Considerations. (1) Business decisions regarding non-interest
charges and fees permitted under this section should be arrived at by
each national bank on a competitive basis and not on the basis of any
agreement, arrangement, undertaking, understanding, or discussion with
other banks or their officers.
(2) Decisions regarding charging non-interest charges and fees,
including their amounts, the method of calculating them, whether to
enter into business relationships or lines of business, and whether
they are set by or in consultation with third parties, are business
decisions to be made by each national bank, in its discretion,
according to sound banking judgment and safe and sound banking
principles. A national bank establishes non-interest charges and fees
in accordance with safe and sound banking principles if it employs a
decision-making process through which it considers the following
factors, among others:
(i) The cost incurred by the national bank in providing the
service;
(ii) The deterrence of misuse by customers of banking services;
(iii) The enhancement of the competitive position of the national
bank in accordance with its business plan and marketing strategy;
(iv) The use of third parties to provide or facilitate the
provision of a product or service; and
(v) The maintenance of the safety and soundness of the national
bank.
(d) Interest. Charges and fees that are ``interest'' within the
meaning of 12 U.S.C. 85 are governed by Sec. 7.4001 and not by this
section.
(e) State law. The OCC applies preemption principles derived from
the United States Constitution, as interpreted through judicial
precedent, when determining whether State laws apply that purport to
limit or prohibit charges and fees described in this section.
(f) National bank as fiduciary. This section does not apply to
charges imposed by a national bank in its capacity as a fiduciary,
which are governed by 12 CFR part 9.
Katherine S. Tyrrell,
First Deputy Comptroller of the Currency.
[FR Doc. 2026-08328 Filed 4-28-26; 8:45 am]
BILLING CODE 4810-33-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.