If you had “federalism” on your May bingo card, this is your week. Federal regulators doubled down on preempting state interchange laws. State regulators doubled down on a fair lending framework the federal regulators just walked away from. And the NCUA dropped a stablecoin proposal in between. The state-versus-federal scoreboard is more active than it has been in some time.
Here’s what moved.
NCUA Joins the OCC in Preempting State Interchange Laws (and Why That Matters in Albany)
- On May 19, 2026, the NCUA submitted an interim final rule (pending publication as of this writing) asserting that federal law preempts state laws restricting interchange fees, with the Illinois Interchange Fee Prohibition Act (IFPA) as the immediate target.
- The NCUA’s move follows the OCC’s April 24 interim final rule and order preempting the IFPA for national banks and federal savings associations. On May 8, the Seventh Circuit vacated the district court’s February 10 judgment upholding the IFPA and remanded the case for reconsideration in light of the OCC actions.
- For New York readers, or credit unions with members who travel to New York, this is not a faraway problem. The Association has been actively engaged on A.4017-A (Asm. McDonald)/S.5587-A (Sen. Skoufis), which would exclude state and local taxes and gratuities from the amount on which interchange is calculated.
- The OCC and NCUA preemption actions shield only federally chartered institutions. Any New York interchange bill that becomes law would still apply to state-chartered credit unions, leaving them to comply with restrictions that their federally chartered competitors are exempt from.
- Avoiding precisely this kind of split is a core reason the Association continues to engage directly with lawmakers in Albany.
NCUA Proposes Stablecoin Issuer Standards Under the GENIUS Act
- On May 15, 2026, the NCUA released a Notice of Proposed Rulemaking establishing operational and risk management standards for an NCUA-licensed Permitted Payment Stablecoin Issuer (PPSI).
- Chairman Hauptman noted the proposed standards are designed to align with those proposed for bank subsidiaries, with the explicit goal that credit unions face no disadvantage relative to banks if they want to participate.
NY Department of Financial Services Reaffirms Disparate Impact for State Chartered Institutions
- A NY DFS Industry Letter dated April 22, 2026 reminds state regulated entities that under New York Executive Law § 296-a, covered credit decisions that result in a disparate impact may still constitute unlawful discrimination in New York.
- This runs counter to both Executive Order 14281 (discussed here) and the CFPB’s final Regulation B rule, which scrubbed disparate impact references from the regulation and the Official Staff Commentary.
- DFS cites three prior consent orders and notes the letter does not impose new requirements; it is restating obligations that have always been there under state law.
Senate Banking Advances CLARITY Act
- On May 14, 2026, the Senate Banking Committee advanced the Digital Asset Market Clarity Act on a bipartisan vote.
- For credit unions, the bill would clarify custodial authority over digital commodities, permit stablecoin rewards (but not deposit-like yield), and create a clearer regulatory pathway for digital asset custody services.
- The bill still needs to be reconciled with the Senate Agriculture Committee’s version and clear a 60-vote Senate floor threshold.
Trump Nominates John Crews to NCUA Board
- On May 12, 2026, President Trump nominated John Crews, currently Deputy Assistant Secretary for Financial Institutions Policy at Treasury, to the NCUA Board.
- If confirmed by the Senate, Crews would replace Chairman Kyle Hauptman, who has been nominated by the SEC to the Public Company Accounting Oversight Board. Hauptman has said he intends to remain at the NCUA until a successor is confirmed.
- The NCUA Board has been operating with a single seated member since the firings of Todd Harper and Tanya Otsuka in 2025, both of whom are challenging their removals in federal court.
Let’s Make This Useful
I want this blog to be as relevant as possible to the people reading it. So:
- Got a topic you’d like me to break down?
- Burning desire to know more about that headline you read the other day?
- Have an industry-related question you want addressed?
Reach out to me at jeremy.newman@nycua.org. Let’s talk.
Until Next Time
From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.