SPRINGFIELD, Ill.– America’s Credit Unions, the Illinois Credit Union League, and several banking organizations have filed a reply brief in support of the motion for summary judgment in a lawsuit challenging the Illinois Interchange Free Prohibition Act (IFPA).

The IFPA 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.  
According to America’s Credit Unions, in the reply brief the group argued that although the court has already recognized that the IFPA is preempted with respect to national banks and federal savings associations, federal law also protects federal credit unions and out-of-state institutions. 

The brief also argues that the state cannot undermine the rights of national banks and other federally protected institutions by targeting their service providers because doing so would be a violation of the Supremacy Clause, America’s Credit Unions said.

‘Filing Makes Clear’
“Our filing makes clear why every participant in the Illinois payment system, including the state’s community banks and credit unions, deserves to be spared from the harm the Illinois Fee Prohibition Act would unleash if allowed to take effect on July 1,” co-plaintiffs Illinois Credit Union League Senior Vice President Ashley Sharp and Illinois Banker Association Executive Vice President Ben Jackson said in a statement. “The biggest losers from this misguided state law will be small businesses and consumers who will experience chaos and confusion every time they try and use their credit card to pay for gas, groceries or a family dinner at a local restaurant. We’ve presented a strong legal case, and we appreciate the court’s willingness to look closely at the facts and the law, which are both on our side.”  
Relief Granted

America’s Credit Unions noted the  U.S. District Court for the Northern District of Illinois granted relief from the law to banks and savings associations in December. America’s Credit Unions, the Illinois Credit Union League, and other organizations filed an additional brief in January explaining why credit unions should also be granted relief.