FMI – The Food Industry Association condemned action April 24 by the Office of the Comptroller of the Currency, banking regulators under the U.S. Treasury Department, to issue two interim final rules that override Illinois swipe fee reform and prohibit other states from enacting similar measures.
Leslie G. Sarasin, FMI president and CEO, framed the regulatory move as a betrayal of grocers, retailers and consumers at a moment of record financial industry profits.
“At a time when the largest banks and credit card networks are pulling in record profits on the backs of grocers, Main Street businesses and millions of American consumers through credit card swipe fees, it is incredibly shortsighted that the OCC banking regulators chose to pursue an opaque end-run around state lawmakers and the courts at the behest of the credit card networks and the nation’s largest banks,” Sarasin said.
How the Illinois law works
Grocers and other merchants act as state and local governments’ agents in the collection and submission of state and local sales and excise taxes.
The Illinois Interchange Fee Prohibition Act, which was set to take effect this summer, would prohibit the imposition of credit card swipe fees on the state and local sales and excise tax and gratuities portion of any sale in the state.
Tax on a tax
“Grocers and consumers are being taxed twice for this official government duty by having to pay credit card swipe fees to the card networks and nation’s largest banks just because we are a pass-through agent for state and local government taxes,” Sarasin said.
“In 2024 alone, these taxes on taxes resulted in nearly $11 billion in swipe fees to the card networks and largest banks on sales tax collection. OCC’s action is particularly alarming considering President Trump has prioritized bringing down costs for businesses and the customers they rely on by endorsing the Credit Card Competition Act (CCCA) to reform the credit card market.”
Sarasin went on to urge the OCC to reverse course and refocus its attention on what FMI characterized as harmful practices by financial institutions.
About FMI
As the food industry association, FMI – The Food Industry Association works with and on behalf of the industry to advance a safer, healthier and more efficient consumer food supply chain.
FMI brings together a wide range of members across the value chain – from retailers and producers to companies providing critical services – to amplify the collective work of the industry.
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