For years, the fight over interchange lived almost exclusively in Washington. That’s where proposals were introduced, debated, and—more often than not—left unresolved.

That’s no longer the case.

Today, the real battleground has shifted. It’s not Capitol Hill. It’s state capitals across the country.

And if credit unions don’t recognize that shift—and respond to it—we’re going to find ourselves playing defense in 50 different arenas instead of one.

I’ve seen this firsthand over the past year through the Defense Credit Union Council’s advocacy work. From Illinois to Colorado to Puerto Rico, a clear pattern has emerged: when federal efforts stall, interchange opponents don’t go away. They go local. They repackage the same policies. And they move them quickly through state legislatures where the stakes are just as high—but the scrutiny is often lower.

Let’s start with Illinois.

The state’s Interchange Fee Prohibition Act didn’t just tweak the system—it attempted to fundamentally rewrite how interchange works by carving out taxes and gratuities from transaction calculations and restricting data usage. From the beginning, DCUC made clear this wasn’t a narrow policy change. It was a direct intrusion into a national payments system that depends on consistency and scale to function.

That’s why DCUC formally urged the National Credit Union Administration to oppose the law and protect parity for credit unions. And it’s why the Office of the Comptroller of the Currency ultimately stepped in, concluding federal law preempts the statute for banks.

But here’s the key point: even with federal regulators weighing in, the uncertainty hasn’t gone away. That’s what happens when states try to regulate a national system piece by piece. You don’t get clarity—you get fragmentation.

Then came Colorado.

Earlier this year, lawmakers introduced legislation targeting interchange on sales taxes. On paper, it was framed as limited—focused on large institutions, positioned as consumer-friendly. But the reality is that payments don’t operate in silos. You can’t carve out one piece of a transaction in one state without forcing system-wide changes.

In our formal opposition, DCUC made clear what that means: increased compliance costs, operational complexity, and ultimately fewer resources for credit unions to serve their members—especially servicemembers and veterans who rely on us most.

And then there’s Puerto Rico.

DCUC has engaged early. We oppose efforts to exclude taxes and gratuities from interchange calculations and made a simple but critical point: there was no evidence consumers would benefit. No proof savings would be passed on. Just a certainty that costs would shift—and that smaller institutions would bear the brunt.

That’s the through line in every one of these fights.

Interchange isn’t just a fee. It’s the revenue stream that supports fraud protection, cybersecurity, card servicing, rewards programs, and digital access. When lawmakers chip away at it—especially in a piecemeal, state-by-state fashion—they’re not just targeting financial institutions. They’re weakening the infrastructure that consumers rely on every day.

And for credit unions, the impact is even more direct.

We don’t have shareholders to absorb losses. We have members. That means when costs go up or revenue goes down, the effects show up in higher fees, reduced benefits, or delayed investments in technology and security.

That’s not theoretical. That’s reality.

Which is why the biggest mistake credit unions can make right now is assuming this is still a federal issue.

It’s not.

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The interchange debate is now happening in state legislatures, in committee hearings, in last-minute amendments, and in regulatory back-and-forth that often flies under the radar until it’s too late.

Illinois showed us how quickly a major policy can become law. Colorado showed how fast copycat legislation can move. Puerto Rico showed that early engagement can make the difference between stopping bad policy and fighting to undo it.

So what do we do?

First, we engage early—before a bill is filed, not after it’s scheduled for a vote.

Second, we engage locally. That means working with state leagues, building relationships with legislators, and making sure they understand what interchange actually funds and why it matters to their constituents.

Third, we engage together.

No single credit union can fight these battles alone. That’s why organizations like DCUC exist—to coordinate strategy, amplify our collective voice, and ensure that when these issues arise, we’re not reacting—we’re leading.

Because make no mistake: the opposition is organized. They are persistent. And they are adapting.

We have to do the same.

The future of interchange policy—and the ability of credit unions to serve their members effectively—will not be decided in one vote in Congress. It will be shaped in dozens of statehouses, often quietly, often quickly, and often without the full story being told.

It’s our job to tell that story.

And it’s our responsibility to show up—early, united, and prepared.

If we don’t, the decisions will still be made.

They just won’t be made with us at the table.

Jason Stverak is Chief Advocacy Officer for the Defense Credit Union Council, a role he assumed in April 2024. He previously served as Deputy Chief Advocacy Officer for Federal Government Affairs at America’s Credit Unions and was interim chief advocacy officer in 2022 and 2023. Earlier in his career, he was deputy chief of staff to Senator Kevin Cramer and held senior legislative roles in Congress and advocacy organizations. A prominent voice on Capitol Hill, Stverak is a frequent media contributor and has been recognized as a top lobbyist by The Hill and the National Institute for Lobbying and Ethics.