Illinois district court hears arguments on interchange challenge

A hearing on cross-motions for summary judgment in a challenge to the Illinois Interchange Fee Prohibition Act (IFPA) took place Wednesday in the U.S. District Court for the Northern District of Illinois. Both America’s Credit Unions and the Illinois Credit Union League were on hand for the latest court proceeding.

“Today’s hearing provided us a great opportunity to reiterate our legal arguments demonstrating that IFPA is not only bad policy that will create chaos in Illinois every time someone tries to use their credit card, it's also clearly pre-empted by federal law. The court has already concluded that national banks deserve relief from the law, and today we were able to show why other players in the payments ecosystem, including Illinois' community banks and credit unions, deserve the same relief. We remain confident that the law and facts are on our side, and we look forward to the judge's ruling in this case,” said Illinois Credit Union League Senior Vice President Ashley Sharp and Illinois Bankers Association Executive Vice President Ben Jackson in a joint statement.

Sharp, Illinois Credit Union League President/CEO Libby Calderone, and America’s Credit Unions Federal Regulatory Compliance Counsel JaMonika Williams attended Wednesday’s hearing.

The IFPA would prohibit financial institutions from charging or receiving interchange fees in Illinois on the tax or gratuity portion of a card transaction. Credit unions are challenging the law due to its negative impacts on the card payments system and consumers.

Retailers attempting to get the law upheld were granted 10 minutes of opening arguments from the Illinois Attorney General’s time. In a September filing, America’s Credit Unions and the Illinois League opposed having the retailers participate in oral arguments. Retailers’ arguments in Wednesday’s hearing consisted of points raised in previous legal filings.

America’s Credit Unions, the Illinois League, and other financial services groups have argued the IFPA is preempted by federal law and allowing it to take effect would lead to chaos and confusion for any consumer, business, and card issuer doing business in Illinois.

Earlier this year, the Illinois League successfully advocated for a one-year delay in the IFPA’s implementation, which is now set for July 1, 2026.