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The law would prohibit interchange fees from being charged on
portions of credit and debit card transactions that include
taxes and gratuities.
The law is currently being challenged in federal court, so the
Illinois General Assembly has moved to delay its implementation
until next year. Gov. J.B. Pritzker still has to sign off on the
legislature’s action to extend the deadline for a year.
“We are pleased because this will give the court the opportunity
to rule on the legality of the law which otherwise would go into
effect,” said Jodie Kelley, CEO of the Electronic Transactions
Association.
The Illinois Bankers Association and the Illinois Credit Union
League were among a group of plaintiffs who filed litigation to
challenge the law last August.
“This law will cause widespread economic disruption, and
mounting evidence shows that the measure overwhelmingly benefits
corporate megastores while placing an undue financial burden on
small businesses and smaller financial institutions that form
the backbone of our local economies,” said Ben Jackson,
executive vice president of the Illinois Bankers Association.
Last October, the Office of the Comptroller of the Currency,
which charters and examines national banks, filed an amicus
brief stating that the Act “is an ill-conceived, highly unusual
and largely unworkable state law,” and “it is likely that fraud
risk would increase significantly, consumer services would be
constrained, and public trust would decline.”
The Illinois Retail Merchants Association, which lobbied for
passage of the law in 2024, said it remains committed to
ensuring implementation of the law is not delayed further.
Kelley said the law is unworkable and is confident the courts
will realize that.
“However, if the court determines that a small portion of the
law is not preempted, we expect the Legislature to repeal what
remains because it would uniquely disadvantage Illinois state
banks and credit unions, a result clearly not intended by the
General Assembly or the governor,” said Kelley.
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