On October 22, federal Judge Kendall heard oral arguments on the IBA’s federal lawsuit challenging the Interchange Fee Prohibition Act (IFPA), which unconstitutionally limits interchange fee paid to debit and credit card issuers.
For over two hours, the IBA and the Illinois Attorney General presented arguments on their cross-motions for summary judgment. Retailers attempting to support the law also had ten minutes of argument time, with the Illinois Attorney General ceding that time from their own forty-five minutes.
Counsel for the IBA and our co-plaintiffs argued that the judge should block the implementation of the IFPA because it unconstitutionally limits interchange fee revenue — which supports fraud prevention, account management, and other important services that card issuers should not have to provide for free.
Following the arguments, Ben Jackson of the IBA joined with Ashley Sharp from the Illinois Credit Union League in issuing the following joint statement:
“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 preempted by federal law. The court has already concluded that national banks are entitled to 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.”
Read write-ups from Crain’s, Bloomberg Law, and Digital Transactions.