Swipe fee battle continues after delay, court ruling
[June 03, 2026]
By Jim Talamonti | The Center Square
(The Center Square) – Illinois is still waiting to benefit from a law
promised to generate hundreds of millions of dollars by restricting
credit and debit card swipe fees.
U.S. District Court Judge Virginia Kendall ruled that a federal order
issued in April effectively blocks the Illinois Interchange Fee
Prohibition Act that was signed into law in 2024.
Hours before the ruling, state lawmakers voted to delay implementation
of the IFPA from July 1 of this year to July 1, 2027 by passing Senate
Bill 3645.
Rob Karr, president and CEO of the Illinois Retail Merchants
Association, said IRMA proposed the law that would generate $200 million
annually and help the state address a budget shortfall.
“Let me repeat that: $200 million annually from retailers, and that
number grows incrementally each and every year,” Karr told the Illinois
House Executive Committee last weekend.
Karr called the IFPA “the largest small business relief package ever
passed by the General Assembly.”
Despite Karr’s testimony, lawmakers voted to delay the law’s effective
date for the second year in a row.
State Rep. John Cabello, R-Machesney Park, said the bill was never heard
in any committee.
“That bill was negotiated, in my opinion, in a back room deal, dead of
night at the governor’s mansion. If it’s that good of a bill, let’s hear
it,” Cabello said.
In October 2024, the Office of the Comptroller of the Currency, which
charters and examines national banks, filed an amicus brief stating that
the IFPA “is an ill-conceived, highly unusual and largely unworkable
state law.”
The American Bankers Association, Illinois Bankers Association,
America’s Credit Unions and Illinois Credit Union League welcomed the
ruling, saying the court concluded that the IFPA could not be applied to
national banks, federal savings associations, payment networks and
certain other financial service providers.
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“The decision will spare millions of Illinois businesses and
citizens from payment chaos,” the groups said in a statement.
On Sunday, Karr reminded lawmakers that banks and credit card
processors previously opposed debit card swipe fees.
“Debit cards are used billions of times every year. Electronic
payments continue to grow,” Karr said.
Karr said banks, credit card companies and processors are predicting
chaos like they did 15 years ago.
“The payments industry remains enormously profitable, and consumers
and retailers have benefited from the debit reforms that brought
greater fairness and competition to the marketplace,” Karr said.
Merchants Payment Coalition executive committee member and National
Association of Convenience Stores general counsel Doug Kantor said
in a statement that he expects the IFPA to eventually be upheld.
In April, Kantor told The Center Square that the Trump
administration could take action to change the rule imposed by the
OCC.
Greg Bishop, Kevin Bessler and Sean Reed contributed to this
story.
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