In an important September 22 decision, the U.S. District Court for the Northern District of Illinois expanded its prior rulings concerning the Illinois Interchange Fee Prohibition Act (“IFPA”) to federal credit unions. The court granted the Illinois Bankers Association’s motion for partial reconsideration and held that the IFPA’s limitation on interchange fees (Interchange Fee Limitation) charged on the tax and gratuities portions of payment card transactions is preempted under the Federal Credit Union Act (FCUA) as applied to federal credit unions. This preemption determination as well as the District Court’s earlier preemption determinations as to other types of financial institutions is being reviewed by the Seventh Circuit.

The court’s ruling followed the National Credit Union Administration’s (NCUA) June 2026 Interim Final Rule addressing the authority of federal credit unions to charge non-interest fees, including interchange fees. The NCUA rule expressly provides that federal credit unions may charge non-interest fees, including interchange fees from credit and debit card operations, and states the NCUA’s view that it has exclusive authority over federal credit unions’ ability to charge such fees.

The court applied ordinary conflict-preemption principles under the FCUA. The court concluded that, in light of the NCUA’s new rule, Illinois’ interchange-fee limitation stands as an obstacle to the federal credit union’s federally authorized ability to conduct its business, particularly where fee-setting involves third parties such as payment networks.

As a result, the court entered a permanent injunction prohibiting Illinois from enforcing the IFPA’s Interchange Fee Limitation against federal credit unions. Federal credit unions now join national banks, out-of-state state-chartered banks covered by Riegle-Neal, federal savings associations, and payment card networks among the entities protected by the court’s injunction.

The decision is significant because it further narrows the reach of Illinois’ interchange-fee restrictions and illustrates the potential preemptive effect of federal agency regulations addressing the authority of federally chartered financial institutions. The case remains subject to further proceedings in the Seventh Circuit. 

One aspect of the court’s analysis warrants particular attention. Under Loper Bright Enterprises v. Raimondo, courts may no longer defer to an agency’s interpretation of an ambiguous statute under Chevron. Instead, the court must exercise its own independent judgment in determining what the Federal Credit Union Act means. Loper Bright nevertheless recognized that an agency’s interpretation may provide persuasive guidance, with its weight depending on such considerations as the thoroughness of the agency’s reasoning, the validity of that reasoning, and the consistency of the agency’s interpretation over time. Skidmore v. Swift & Co., 323 U.S. 134 (1944).

The district court did not cite Skidmore. It did, however, expressly recognize Loper Bright and state that it was required to decide questions of statutory interpretation using its “own independent judgment.” The court also emphasized that agencies have no special authority to decide preemption questions absent a congressional delegation of such authority.

At the same time, the NCUA’s IFR played a central role in the court’s ultimate analysis. The court devoted an entire section of its opinion to analyzing the IFR and relied extensively on the NCUA’s explanation that federal credit unions have authority to charge non-interest fees, including interchange fees, and that such fees may be established through relationships with third parties. The court then independently concluded that, where coordination with third parties concerning fee-setting is necessary to maintain federally authorized credit lines, the IFPA would stand as an obstacle to the accomplishment of the FCUA’s purposes.

Thus, the decision should not be read as applying Chevron deference to the NCUA. Rather, the court appears to have used the IFR as an important source of information and reasoning in exercising its own judgment concerning the scope and purposes of the FCUA. The distinction could become significant on appeal, particularly because the court expressly declined to decide whether portions of the IFR exceeded the NCUA’s statutory authority, resolving the case instead on narrower grounds based on the IFR’s treatment of non-interest fees and the FCUA’s incidental-powers provision.