Comments to OCC: National Bank Non-Interest Charges and Fees

By SBE Council at 27 May, 2026, 2:41 pm

Chief Counsel’s Office

Attention: Comment Processing

Office of the Comptroller of the Currency

400 7th Street SW

Suite 3E-218

Washington, DC 20219

Re:    Interim Final Rule: RIN 1557-AF54; Docket ID OCC-2026-0430

          Interim Final Order: RIN 1557–ZA10, Docket ID OCC–2026–0431

To Whom it May Concern:

The Small Business & Entrepreneurship Council (SBE Council) appreciates the opportunity to comment on the Office of the Comptroller of the Currency’s (OCC) interim final rule, National Bank Non-Interest Charges and Fees,^[1] and interim final order, Order Preempting the Illinois Interchange Fee Prohibition Act.^[2] SBE Council supports these actions. Entrepreneurs and small business owners depend on a stable, nationally integrated payments system to serve customers efficiently, manage cash flow, reduce fraud risk, and keep goods and services as affordable as possible. The OCC’s actions help preserve that stability at a time when the Illinois Interchange Fee Prohibition Act threatens to introduce operational disruption, higher costs, and uncertainty into the payment systems that businesses and consumers use every day.^[3]

Congress established the national banking system to support interstate commerce and ensure consistent access to financial services nationwide. That uniformity is especially important for small businesses and the self-employed, who lack the legal staff, compliance departments, or technological resources to navigate a patchwork of conflicting state mandates. A nationally consistent framework helps reduce compliance costs and operational friction, enabling banks and payment networks to provide lower-cost products and reliable card services to merchants and consumers in every region. For small businesses, that consistency translates directly into predictable transactions, manageable back-office operations, and a greater ability to keep prices within reach for customers.

The OCC’s interim final rule and order, therefore, serve an important function: they reinforce longstanding federal principles that help maintain a workable and affordable payments system.

Uniform regulation has fostered the development of the modern payment system, including the credit and debit card networks that small businesses use every day. Those networks support fast, secure, and dependable payment processing across state lines and across industries. They also support fraud-prevention, risk-management, and data practices necessary to ensure transactions clear efficiently and that consumers and merchants are protected. Small businesses are particularly dependent on those features. A delayed transaction, a failed authorization, or a weakened fraud-control environment can mean lost sales, cash-flow strain, customer frustration, and additional administrative burdens that are far more difficult for a small business to absorb than for a large national business or chain.

The Illinois Interchange Fee Prohibition Act threatens to upend that integrated framework. By prohibiting banks, credit unions, and payment networks from charging interchange fees on the tax and tip portions of a debit or credit card transaction, the law attempts to impose a state-specific operational rule on a nationwide system. The OCC has explained that its interim final rule clarifies that national banks’ power to charge non-interest fees includes interchange fees from credit and debit card transactions, and its interim final order concludes that federal law preempts the Illinois law as applied to national banks and federal savings associations. Those determinations are important because the payments ecosystem depends on national consistency. If one state can effectively compel redesigns to core payment processes, the result will not be isolated or costless; it will create uncertainty for merchants, processors, issuers, and consumers well beyond Illinois.

The law is also unworkable in practice. It is scheduled to take effect on July 1, 2026, and the available record indicates significant uncertainty about whether the existing payments infrastructure can reliably separate taxes and gratuities from the total transaction amount for interchange-fee purposes across the full range of merchant systems.^[4] The risks are not theoretical. If participants in the payment system cannot implement the law consistently, transactions may be delayed, declined, or routed in confusing ways at the point of sale. The statute’s reported $1,000-per-transaction penalty only heightens the pressure to adopt defensive practices that could impair the customer experience and increase compliance costs. For small businesses, disruption at checkout is not a minor inconvenience; it can mean abandoned purchases, reduced revenue, damaged customer relationships, and immediate strain on day-to-day operations.

Restrictions on payment-card data usage also raise serious concerns. Fraud detection, risk scoring, dispute resolution, and transaction security all rely on lawful access to and analysis of payment data. When those functions are impaired, smaller merchants are among the first to feel the consequences because they have fewer internal resources to absorb fraud losses, investigate suspicious activity, or navigate complicated compliance disputes. A payment regime that increases data uncertainty or weakens fraud controls will not promote affordability or stability for Main Street businesses. It will instead increase risk and force smaller firms to devote more time and money to managing problems that a stable national system is designed to prevent.

From the perspective of small businesses, the most important policy question is whether the payment system will remain predictable, affordable, and secure. A patchwork of conflicting state requirements would make that more difficult. Additional compliance costs imposed on banks, payment processors, networks, and merchants do not disappear; they ripple through the broader economy. They can reduce affordability for consumers, limit access to credit and financial services, and make it harder for businesses to invest, hire, and expand. Interchange-fee revenue also helps support rewards programs, fraud prevention, and continued investment in payment-system security and innovation. If those revenues are constrained by state-by-state mandates, consumers and small businesses may experience fewer benefits, diminished reliability, and less economic stability overall.

Consumers and small businesses would likely experience these effects directly at checkout and in everyday operations. Inconsistent transaction experiences, processing delays, and greater confusion over how charges are handled would undermine confidence in card payments. Networks and processors subject to state-specific redesign obligations may pass on higher costs to the system, creating additional pressure on merchants and households nationwide. And there is no assurance that any theoretical reduction in interchange costs would be passed on to consumers in the form of lower prices. What is much more predictable is that operational complexity and legal uncertainty tend to favor larger entities with more resources, while placing smaller merchants at a disadvantage.

Conclusion

For these reasons, SBE Council supports the OCC’s interim final rule and interim final order. Small businesses need a payment system that is nationally consistent, secure, efficient, and affordable. They also need a regulatory framework that protects operational certainty rather than introducing avoidable disruption into the checkout process and the broader flow of commerce. The OCC’s actions help preserve that certainty and help protect consumers and small businesses from the higher costs, confusion, and instability that would result from state-level interference with the nationwide payments system.

SBE Council appreciates the opportunity to comment on the interim final rule, and we thank the OCC for its consideration.

Sincerely,

Karen Kerrigan, President & CEO

[1] https://www.regulations.gov/document/OCC-2026-0430-0001.

[2] https://www.regulations.gov/document/OCC-2026-0431-0001.

[3] https://ilga.gov/Legislation/ILCS/Articles?ActID=4515&ChapterID=67&Print=True.

[4] https://laweconcenter.org/resources/regulating-state-interchange-fees-evaluating-the-likely-effects-of-the-ifpa/.