On October 30, oral arguments were held in the Chicago federal courthouse on the IBA’s federal lawsuit challenging Illinois’ Interchange Fee Prohibition Act. The deliberations were the latest step in our efforts to obtain a preliminary injunction (PI) against the law. Obtaining a PI would halt implementation of the law while our substantive legal challenge of the law proceeds.
For over two hours, the judge heard arguments on the IBA and our co-plaintiffs’ motion for a preliminary injunction, the Illinois Attorney General’s motion to dismiss our lawsuit, and retailer groups’ motion to intervene. If the PI is not granted, we argued, financial institutions will continue incurring significant preparation costs to comply with the law by its effective date (July 1, 2025).
Attorneys for the IBA and our co-plaintiffs argued that the Interchange Fee Prohibition Act’s limitations on interchange fees and data usage restrictions were preempted by federal law, and by associated state chartering laws, and would create chaos for what is now an efficient, safe, and effective payment system. They also referenced the Office of the Comptroller of the Currency’s brief siding with the IBA in opposing the law. The OCC called the law “ill-conceived, highly unusual, and largely unworkable.”
The judge did not issue any decisions during the hearing and did not indicate how or when she would rule. Following the arguments, Ben Jackson of the IBA joined with Ashley Sharp from the Illinois Credit Union League in issuing the following joint statement:
“As our legal team shared in the hearing, this misguided state law will unleash payment chaos on the people of Illinois unless the court grants us a preliminary injunction barring its implementation. The payment system IFPA calls for barring interchange fees on taxes and tips does not exist anywhere else in the world, and for good reason. It is a bad idea that will create unnecessary mayhem for consumers, businesses and financial institutions of all sizes, while padding the profits of corporate megastores.”
Read coverage of the oral arguments from WTTW, American Banker, Center Square, the Chicago Tribune, Crain’s Chicago Business, Law360, and Bloomberg Law.