Preemption-Federal Credit Union Non-Interest Charges and Fees
Key claim: The NCUA is adopting an interim final rule clarifying that federal credit unions have broad authority to charge non-interest fees and charges, including interchange fees from card operations, even when those fees are set by or in consultation with third parties.
Abstract
(Rule · National Credit Union Administration) The NCUA Board is adopting an interim final rule to clarify federal credit unions’ (FCUs) 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 FCUs may charge non- interest charges or fees, even when such charges and fees are set by or in consultation with third parties. NCUA invites public comments on this interim final rule.
Why this matters
For federal credit unions, the rule removes ambiguity about their ability to charge and retain a wide array of non-interest fees — most notably interchange — and shields those fees from state-law challenges through federal preemption. For consumers and merchants, it entrenches the current fee structure of FCU card programs at a time when interchange is under political and legislative pressure. It also signals NCUA’s willingness to use interim final rulemaking to lock in favorable interpretations of FCU incidental-powers authority.