April 29, 2026
Obscure Government Regulator Steps in to Protect Credit Card Companies and Big Banks from Illinois Swipe Fee Law
New rules increase the urgency for Congress to pass the Credit Card Competition Act
Washington, D.C. – In a sweeping interim final order, issued without prior notice or public comment, the Office of the Comptroller of the Currency (OCC) is attempting to invalidate an Illinois law that would make swipe fees a little more affordable for restaurant operators. At the same time, the regulator is also seeking to make extensive amendments to the National Bank Act to ensure that states could not use legislation similar to the Illinois Interchange Fee Prohibition Act to protect restaurants and other businesses from the cost of rising credit card interchange fees on passthrough dollars like taxes and tips.
The National Restaurant Association strongly opposes the OCC’s action and calls on the Trump Administration to retract the rules.
“These two rules effectively rewrite federal law just two months after a federal judge upheld the Illinois statute, finding that swipe fees set by payment card networks fall outside the banking activities governed by the National Banking Act,” said Sean Kennedy, Chief Advocacy Officer of the National Restaurant Association. “By stepping in before the appeal can even be heard, regulators have short-circuited the legal process and wiped-out changes that would have saved Illinois businesses more than $507 million they’re currently paying to act as the state’s tax collector.”
The OCC actions enable coordination and effective pricefixing of interchange fees
In the rules, the OCC clarifies that “the factors a national bank considers include the use of third parties to provide or facilitate the provision of a product or service,” and that their “products and services may be more efficiently and effectively provided through the use of third parties, which may also make or influence decisions regarding pricing.”
However, this position greenlights a system that allows pricefixing by design, enabling the largest banks and credit card companies to set swipe fees collectively, without competition or accountability. By permitting card networks to establish uniform interchange fees on behalf of all issuing banks, while simultaneously blocking states from imposing limits or safeguards, the rules cement a closed system where banks don’t compete on price and merchants have no ability to negotiate. The result is coordinated, nonnegotiable fees applied nationwide, raising costs for businesses and consumers while shielding card networks from the normal checks of market competition or local oversight.
U.S. payment system is broken and badly in need of reform
With no federal laws governing the cost of credit card transactions, the two companies that control more than 80% of the market centrally fix interchange fees that average 2–4% per transaction, the highest in the industrialized world. These fees cost business owners more than $198 billion annually. In fact, in 2024, businesses were forced to pay $11 billion in swipe fees while acting as the tax collector for their states. This equals thousands of dollars of a restaurant owner’s profits that come out of their razor-thin 3-5% margins each year.
These rising costs are especially challenging for the 42% of restaurant operators that were not profitable in 2025. As swipe fees continue to rise, driven by nonnegotiable fees set by the dominant card networks, the current payment system magnifies affordability challenges for business owners, drives up prices for consumers, and threatens the ability of local restaurants to serve as engines of economic growth in their communities.
Swipe fee reform legislation is workable for all parties in the payments ecosystem
A competitive payments system is not only possible but already achievable without extensive changes by credit card companies. State legislation and the Credit Card Competition Act are carefully crafted as workable solutions for all players in the U.S. payments ecosystem. They take targeted approaches that preserve card acceptance, points and rewards programs, fraud protections, and payment efficiency. Credit card companies already operate in a competitive debit market where similar reforms spurred innovation, improved service, and strengthened security, including end-to-end encryption.
It’s time to pass the Credit Card Competition Act
Because of the OCC’s move, the affordability of accepting credit cards just got a little more difficult for restaurant owners. Swipe fees are generally among their highest costs – often only behind food and labor – and U.S. swipe fees have more than doubled over the past decade. This means the best way for Congress to support small business restaurant owners right now is to pass the Credit Card Competition Act. The legislation would simply open up the credit card processing ecosystem to competition, which would help bring down costs for consumers and restaurant owners and is needed now more than ever given the OCC’s greenlighting of price-fixed swipe fees.
Learn more about how the Credit Card Competition Act would bring down costs for restaurants here.
The National Restaurant Association strongly opposes the OCC’s action and calls on the Trump Administration to retract the rules.
“These two rules effectively rewrite federal law just two months after a federal judge upheld the Illinois statute, finding that swipe fees set by payment card networks fall outside the banking activities governed by the National Banking Act,” said Sean Kennedy, Chief Advocacy Officer of the National Restaurant Association. “By stepping in before the appeal can even be heard, regulators have short-circuited the legal process and wiped-out changes that would have saved Illinois businesses more than $507 million they’re currently paying to act as the state’s tax collector.”
The OCC actions enable coordination and effective pricefixing of interchange fees
In the rules, the OCC clarifies that “the factors a national bank considers include the use of third parties to provide or facilitate the provision of a product or service,” and that their “products and services may be more efficiently and effectively provided through the use of third parties, which may also make or influence decisions regarding pricing.”
However, this position greenlights a system that allows pricefixing by design, enabling the largest banks and credit card companies to set swipe fees collectively, without competition or accountability. By permitting card networks to establish uniform interchange fees on behalf of all issuing banks, while simultaneously blocking states from imposing limits or safeguards, the rules cement a closed system where banks don’t compete on price and merchants have no ability to negotiate. The result is coordinated, nonnegotiable fees applied nationwide, raising costs for businesses and consumers while shielding card networks from the normal checks of market competition or local oversight.
U.S. payment system is broken and badly in need of reform
With no federal laws governing the cost of credit card transactions, the two companies that control more than 80% of the market centrally fix interchange fees that average 2–4% per transaction, the highest in the industrialized world. These fees cost business owners more than $198 billion annually. In fact, in 2024, businesses were forced to pay $11 billion in swipe fees while acting as the tax collector for their states. This equals thousands of dollars of a restaurant owner’s profits that come out of their razor-thin 3-5% margins each year.
These rising costs are especially challenging for the 42% of restaurant operators that were not profitable in 2025. As swipe fees continue to rise, driven by nonnegotiable fees set by the dominant card networks, the current payment system magnifies affordability challenges for business owners, drives up prices for consumers, and threatens the ability of local restaurants to serve as engines of economic growth in their communities.
Swipe fee reform legislation is workable for all parties in the payments ecosystem
A competitive payments system is not only possible but already achievable without extensive changes by credit card companies. State legislation and the Credit Card Competition Act are carefully crafted as workable solutions for all players in the U.S. payments ecosystem. They take targeted approaches that preserve card acceptance, points and rewards programs, fraud protections, and payment efficiency. Credit card companies already operate in a competitive debit market where similar reforms spurred innovation, improved service, and strengthened security, including end-to-end encryption.
It’s time to pass the Credit Card Competition Act
Because of the OCC’s move, the affordability of accepting credit cards just got a little more difficult for restaurant owners. Swipe fees are generally among their highest costs – often only behind food and labor – and U.S. swipe fees have more than doubled over the past decade. This means the best way for Congress to support small business restaurant owners right now is to pass the Credit Card Competition Act. The legislation would simply open up the credit card processing ecosystem to competition, which would help bring down costs for consumers and restaurant owners and is needed now more than ever given the OCC’s greenlighting of price-fixed swipe fees.
Learn more about how the Credit Card Competition Act would bring down costs for restaurants here.
About the National Restaurant Association
Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises more than 1 million restaurant and foodservice outlets and a workforce of 15.7 million employees. Together with 52 State Associations, we are a network of professional organizations dedicated to serving every restaurant through advocacy, education, and food safety. We sponsor the industry's largest trade show (National Restaurant Association Show); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF's ProStart). For more information, visit Restaurant.org and find @WeRRestaurants on Twitter, Facebook and YouTube.