Financial institutions continue fight against Illinois’ swipe fee law
[May 13, 2025]
By Kevin Bessler | The Center Square
(The Center Square) – Plaintiffs in the lawsuit challenging Illinois’
Interchange Fee Prohibition Act say they are in an important final
stretch.
The law prohibits a credit card holder’s bank from charging or receiving
interchange fees on portions of transactions, including taxes and tips.
The Illinois Bankers Association and Illinois Credit Union League, along
with co-plaintiffs the American Bankers Association and America’s Credit
Unions, filed a reply in support of their motion for summary judgment
and permanent injunction, and in opposition to the defendant’s motion
for summary judgment.
The group argues that the court has already recognized that the IFPA is
preempted with respect to national banks and federal savings
associations, and that federal law entitles out-of-state state-chartered
banks to parity of treatment with national banks. The plaintiffs also
note in the brief that federal law also protects federal credit unions
and out-of-state institutions and argue that the state cannot undermine
the rights of national banks and other federally protected institutions
by targeting their service providers.
“We strongly believe that applying any part of this law to any party in
the payment system, be it a bank or credit union card network, is
fundamentally flawed,” said Ben Jackson, vice president of government
relations with the Illinois Bankers Association.
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The plaintiffs urged the court to “reject the Attorney General’s
effort to hollow out the Supremacy Clause” and “enter a broad
injunction that provides meaningful relief.”
In April, Illinois U.S. Sen. Dick Durbin, D-Springfield, who
recently announced he will not seek re-election in 2026, filed a
second amicus brief in the District Court for the Northern District
of Illinois in support of the IFPA. Durbin previously filed an
amicus brief in support of the law in 2024.
"Our filing makes clear why every participant in the Illinois
payment system, including the state's community banks and credit
unions, deserves to be spared from the harm the Illinois Fee
Prohibition Act would unleash if allowed to take effect on July 1,”
said Jackson. “The biggest losers from this misguided state law will
be small businesses and consumers who will experience chaos and
confusion every time they try and use their credit card to pay for
gas, groceries or a family dinner at a local restaurant.”
The Illinois Attorney General’s office is expected to file a
response to plaintiffs’ latest motion by the end of the month.
Illinois is the only state that has passed legislation to prohibit
and reshape how interchange fees are charged.
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