OTHER BANKING NEWS
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Court Rules Federal Law Preempts Illinois Interchange Law
A federal court has ruled that an Illinois law restricting the collection of interchange fees is preempted by federal law for national banks, federal savings associations, out-of-state state-chartered banks protected by federal law and payment card networks, reversing its prior conclusion.
The Illinois Interchange Fee Prohibition Act, or IFPA, was originally scheduled to take effect on July 1, but state lawmakers voted to push back the implementation date to 2027. The American Bankers Association, Illinois Bankers Association and others challenged the law in U.S. District Court for Northern Illinois, which upheld most of the IFPA in a ruling earlier this year.
Last month, the Seventh Circuit U.S. Court of Appeals remanded the case back to the lower court after the Office of the Comptroller of the Currency took two actions. First, the OCC issued an interim final order asserting that federal law preempts the IFPA. Second, the agency issued an interim final rule confirming the longstanding powers under federal law for national banks to charge certain fees, regardless of whether the bank sets those fees or a third party.
District Judge Virginia Kendall evaluated the OCC’s interim final measures, ultimately concluding that the plaintiffs proved irreparable harm warranting a permanent injunction. She also ruled in favor of federal preemption.
The court issued a permanent injunction against enforcing IFPA’s interchange-fee prohibition and data-usage limitations against national banks, banks chartered by states other than Illinois, federal savings associations and payment card networks. But she didn’t exempt other financial institutions from the interchange fee prohibition, such as credit unions, out-of-state chartered savings associations and out-of-state chartered savings banks. She did, however, exempt federal credit unions from the law’s data usage limitations.
The new ruling comes as several states consider legislation modeled on the IFPA. Colorado lawmakers recently passed legislation to ban the collection of interchange fees on sales taxes. However, Gov. Jared Polis vetoed the legislation, saying it presented too much legal risk to the state’s business environment and consumers.
IRS Releases Health Savings Account Amounts For 2027
The IRS has released the inflation-adjusted contribution limits and high-deductible health plan requirements for 2027. For the coming year, the annual contribution limit for individuals with self-only coverage under a high-deductible health plan is $4,500. The annual contribution limit for individuals with family coverage is $9,000.
Also, for 2027, the minimum annual deductible for a high-deductible health plan is $1,750 for self-only coverage and $3,500 for family coverage. The maximum annual out-of-pocket limit — such as deductibles, co-payments and other amounts, but not premiums — is $8,700 for self-only coverage and $17,400 for family coverage
To read more, visit: https://www.irs.gov/pub/irs-drop/rp-26-24.pdf
FDIC Proposes Bank Secrecy Act, Sanctions Requirements for Stablecoin Issuers
The FDIC has proposed a new rule to establish Bank Secrecy Act and sanctions compliance standards for stablecoin issuers regulated by the agency.
The Genius Act directs federal banking agencies to implement regulations for stablecoin issuers. The FDIC previously proposed two rules to establish the process for which bank subsidiaries can apply to become issuers, and to set capital, liquidity and risk management requirements for those same issuers.
The proposed rule would require issuers to comply with any applicable regulations regarding anti-money laundering/countering the financing of terrorism (AML/CFT), economic sanctions program and reporting requirements, including requirements promulgated by the Financial Crimes Enforcement Network and the Office of Foreign Assets Control, according to a financial institutions letter. It would also establish supervision and enforcement provisions for AML/CFT programs, in alignment with FinCEN requirements.
Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.
To read more, visit: https://www.fdic.gov/board/bank-secrecy-act-and-sanctions-compliance-standards-fdic-supervised-permitted-payment