Credit unions’ efforts to challenge the Illinois Interchange Fee Prohibition Act (IFPA) continued with two separate court filings Friday. This includes a response to the Illinois Attorney General’s motion to dismiss and a  motion to intervene from several retailer associations.

The IFPA would ban financial institutions from charging or receiving interchange fees in Illinois on the portion of a debit or credit card transaction attributable to tax or gratuity. The law takes effect July 1, 2025, unless efforts to obtain a preliminary injunction are successful.

America’s Credit Unions, the Illinois Credit Union League, and banking groups filed a challenge to the IFPA in August. The Office of the Comptroller of the Currently filed a brief backing the credit union argument earlier this month.

Friday’s filing questioned the AG’s claims of “sovereign immunity” and further explained the urgency of a preliminary injunction. “A preliminary injunction would save millions of dollars in investment in new automated systems and mindbogglingly burdensome manual processes that will all be wasted when the law is eventually found invalid,” the brief reads.

“If allowed to take effect, the IFPA would require banks, savings banks, credit unions, and networks worldwide to overhaul payments systems that allow consumers and merchants to instantly consummate millions of transactions every day,” it reads. “ But the law is preempted under multiple sources of federal law and, in turn, invalid under state and federal law that guarantee state-chartered institutions competitive parity.  

The organizations add the preliminary injunction would “save millions of dollars’ investment in new automated systems and mindbogglingly burdensome manual processes that will all be wasted” when the law is eventually found invalid.”

In the response to the retailer groups, America’s Credit Unions, the Illinois Credit Union League, and others note there is no justification for their participation as parties to the litigation, nor does their request to intervene propose to add anything to the merits of the case.

“At the heart of Plaintiffs’ case is a pure question of law about whether the IFPA’s interchange and data usage restrictions impermissibly interfere with federal banking powers—a question the Attorney General is fully competent to litigate,” the brief reads. “By contrast, the Retail Associations would only add distraction and complexity by using party status as a staging ground for their policy interests.”