The “Swipe Fee ripoff,” as President Donald Trump succinctly described, is a scourge on American small businesses and consumers. Charging vendors roughly 2.5% of every credit card transaction, these swipe fees accumulate at such a rapid pace that they’ve become one of the largest expenses for businesses, compelling many store owners to pass the costs down to their customers via increased prices. That is a real part of the affordability problem for the public right now.
Illinois took the lead at the state level to address this dilemma by passing the Interchange Fee Prohibition Act in 2024. This law is the first of its kind in the nation to ban financial institutions from charging swipe fees on the tax and tip portion of card transactions – money that Main Street stores don’t even get to keep. Scheduled to take effect on July 1, the IFPA could pave the way for other states adopting legislation that will save local businesses thousands of dollars in swipe fees.
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The Office of the Comptroller of the Currency, however, seeks to rebuke Trump’s position and obstruct that path.
Previously, the OCC, in tandem with various bank trade associations, filed arguments claiming the IFPA unlawfully preempted federal banking regulations. A federal district court rejected their arguments, and the trade associations have since appealed the ruling to the Seventh Circuit Court of Appeals. Now, the OCC has quietly published two filings set to take effect on June 30, preempting state legislation and preventing states from eliminating swipe fees on state taxes. Although the OCC has not publicly commented on these proposals, the organization’s objective is clear: to circumvent the lawsuit they are already losing and halt any efforts to curtail swipe fees.
Our country is struggling through an affordability crisis. Trump agrees U.S. businesses and consumers alike deserve to find some relief from the crisis through swipe fee reduction, yet the OCC is standing in direct opposition to his agenda. Trump’s One Big Beautiful Bill Act, for instance, enables service workers to retain as much of their tips as possible. The IFPA would similarly prohibit swipe fees from being deducted from those tips. Without the IFPA, many people, including the local barber and beautician, will lose a big part of their tips to big Wall Street banks and credit card companies. That’s wrong and certainly will look like taxing those tips all over again.
CONTROVERSIAL SWIPE FEE LAW IN ILLINOIS GOES TO COURT
Last year, swipe fees in the United States totaled nearly $200 billion, sucking vital revenue out of our local communities and accounting for the second-highest operating expense after labor for most businesses. Credit card swipe fees only continue to grow so long as Visa and Mastercard’s dominance over the payments industry goes unchecked. They continue to use their market control to box out competitors and raise fees however they choose, forcing legislators to act if American businesses and consumers are ever going to see financial relief.
These filings from the OCC reveal their role as a tool for the largest financial institutions to undermine Trump’s goal of making our country more affordable. The president has made his position on this issue very clear, emphasizing that swipe fees must be reduced to a more reasonable rate. That’s why he’s gone a step further and endorsed federal legislation known as the Credit Card Competition Act. The OCC’s actions would not only preempt the IFPA and state legislation nationwide but also undermine Trump’s agenda. The OCC should retract its filings and stop trying to hold up the president’s efforts to make life more affordable for everyday people.
CJ Pearson is the host of the CJ Pearson Show, national co-chair of the RNC Youth Advisory Council, and a conservative political adviser.
