Credit union, bank legal challenge to new Illinois interchange law underway

America’s Credit Unions and the Illinois Credit Union League joined with banking groups in filing a complaint in the U.S. District Court for the Northern District of Illinois that challenges the Illinois Interchange Fee Prohibition Act (IFPA).  The American Bankers Association and Illinois Bankers Association are also involved in the legal challenge, which seeks a preliminary injunction halting implementation of the new law while the court decides the merits of the case.

The IFPA was signed into law on June 7. It would ban financial institutions – including credit unions, payment networks and other entities from charging or receiving interchange fees in Illinois on the portion of a debit or credit card transaction attributable to tax or gratuity.

“Illinois lawmakers made a grave mistake when throwing small businesses, consumers, and local economies to the wayside in the Land of Lincoln when they passed the IFPA,” said Jim Nussle, America’s Credit Unions president/CEO. “America’s Credit Unions is joining this lawsuit with our banking trade partners to send a clear message – we will always stand up for the American consumer when interchange and the electronic payment ecosystem is disrupted to benefit bad actors and big box retailers. With over 4 million people in Illinois trusting credit unions to help live their best financial lives, it is our duty to combat unconstitutional legislation.”

 

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