(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.
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.
