CHICAGO–Following a judge’s ruling the largely upheld the Illinois Interchange Fee Prohibition Act (IFPA) last week, America’s Credit Unions, the Illinois Credit Union League, the American Bankers Association and the Illinois Bankers Association have filed an appeal with the U.S Court of Appeals for the Seventh Circuit.
As the CU Daily reported here, the plaintiffs had expressed “deep disappointment” after the federal judge upheld a central part of Illinois’ novel Interchange Fee Prohibition Act(IFPA), clearing the way for the state’s first-in-the-nation ban on certain credit and debit card “swipe fees.”
In the 47-page opinion, U.S. District Court Judge Virginia M. Kendall of the Northern District of Illinois denied a bid by banks, credit unions and trade associations to block enforcement of the portion of the law that bars issuers from collecting interchange fees on the tax and gratuity portions of card transactions, according to Bloomberg Law. The decision means that the provision of the IFPA targeting those fees will move forward as scheduled this summer.
The law is set to go into effect July 1.
Earlier Ruling
A district court had earlier granted relief from the law to banks, savings associations, and out-of-state state-chartered banks in 2024, but last week’s decision granted relief to financial institutions for the data usage provisions of the law, not the interchange fee portion.
The appeal, which the plaintiffs had said they would file after the most recent ruling, seeks a declaratory judgment that the IFPA is contrary to federal law, as well as an injunction prohibiting state officials from applying or enforcing it, America’s Credit Unions stated.
