Merchants blast credit union rule

A major legal battle is brewing over how much you pay in swipe fees. Retail and restaurant groups are suing federal credit union regulators. The conflict centers on a new Illinois law called the Interchange Fee Prohibition Act. This law stops banks and card issuers from charging swipe fees on the tax and tip portions of a transaction. If it stands, it would lower your overhead on every credit card sale. However, the National Credit Union Administration (NCUA) recently issued a rule claiming that credit unions don't have to follow this state law. For merchants, this is a direct hit to the bottom line. Retail groups argue the NCUA is overstepping its authority and bypassing state protections meant to lower costs for small businesses. If the NCUA wins, it creates a fragmented system. You might see lower fees on cards from big national banks but keep paying high fees on cards issued by credit unions. This legal fight will determine if other states can successfully pass similar laws to curb merchant fees. We are watching this closely because it impacts the total cost of credit acceptance across all retail categories. If the merchant groups win, it sets a precedent for nationwide fee relief on taxes and tips.

Source: Payments Dive

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