Federal credit unions
Federal credit unions can keep charging card fees, NCUA says
The interim final rule says federal credit unions may keep charging card-related fees, including fees on credit and debit card transactions, even when state law tries to cap them. NCUA also puts its old preemption language into one section of its rulebook.
The National Credit Union Administration has expanded the federal shield around fees federal credit unions can collect. The rule includes card interchange fees, says state limits on those charges are preempted, and puts the agency’s preemption language in one place.
- Federal credit unions can keep charging covered non-interest fees.
- The rule explicitly includes card interchange fees.
- NCUA says state caps on those charges are preempted.
- The agency is consolidating its preemption language into one section.
- Card fees tied to federal credit unions just got a wider federal shield
Card fees tied to federal credit unions just got a wider federal shield. The National Credit Union Administration, or NCUA, says federal credit unions may continue to charge non-interest charges and fees, including interchange fees from credit and debit card operations, even when state law tries to limit them.
The agency’s view is broader than a simple fee on a statement. In Washington, NCUA says “charge” means to assess, collect, impose, levy, receive, reserve, take or otherwise obtain those fees, including through fee sharing or a similar economic relationship.
What the rule reaches
That definition matters because it reaches the money flow around card transactions, not just a posted monthly charge. Interchange fees, the fees that travel with card use, are part of the agency’s rule, along with other non-interest charges and fees tied to federal credit union business.
NCUA says state laws that limit those charges are preempted. For federal credit unions, that draws a federal boundary around a part of the business that affects members at the checkout counter and on account statements, even if the exact fee is not always visible to the customer.
One preemption section
NCUA is also rewriting the rulebook itself. The agency is adding a new Section 701.5 on preemption to Part 701 and folding material from Sections 701.21(b) and (g)(6) and 701.35(c) and (d) into that section.
The practical effect is to put the agency’s position in one place: federal credit unions can collect covered non-interest charges and fees under federal law, and state limits do not control those charges for federal credit unions.