WASHINGTON, D.C (July 14, 2025) |
On Friday evening, the Defense Credit Union Council (DCUC) engaged the D.C. Councilmembers to reject a sudden and unvetted proposal that could drastically change how credit and debit card payments are handled within the district.
The amendment—tucked into the Budget Support Act without public hearings or debate—would ban processing fees on sales tax and tips. DCUC stressed this move would hurt tipped workers, confuse customers, and reduce local tax revenues—all while threatening D.C.’s bustling tourism economy.
“This proposal is being rushed through without any public input or understanding of its consequences,” says Jason Stverak, DCUC Chief Advocacy Officer. “It’s a risky policy that could hurt D.C. workers, small businesses, and even the city’s budget.”
In the letter, DCUC warned that without the ability to tip using a card, restaurant and service workers could see a sharp drop in income. DCUC also shared that removing interchange fees from tips and taxes would force businesses to reprogram payment systems and explain new rules to frustrated customers, and cause tourism to take a hit.
Stverak reminded that in 2023, airline credit card rewards helped generate nearly 300,000 trips to D.C., fueling over $300 million in local spending, but with the proposed legislation, these popular programs would likely be weakened or eliminated altogether, discouraging travel and hurting local businesses.
DCUC voiced its concern of members attempting to pass this change during final budget votes—without transparency or stakeholder input. Stverak referenced how similar legislation passed in Illinois last year caused widespread confusion, legal challenges, and was even delayed by the Governor due to its flawed rollout.
“Legal experts have already flagged it as likely unconstitutional under federal banking law. Why repeat another state’s mistakes? This is a complex issue that deserves open discussion—not a backroom deal,” says Stverak.
DCUC’s letter noted that more than 20 states have considered and rejected this same idea just this year.
“No other state—or country—has successfully implemented this change. We also know that both Alaska and Rhode Island officials warned lawmakers that it would likely reduce tax collections and complicate enforcement,” says Anthony Hernandez, DCUC President/CEO. “We’re calling on the Council to hit pause, bring this issue into the daylight, and start a real public conversation before making changes that could damage D.C.’s economy.”