CHICAGO– Illinois Attorney General Kwame Raoul has filed a cross-appeal seeking to overturn the injunction on the data use provisions in the Illinois Interchange Fee Prohibition Act (IFPA). As the CU Daily has been reporting, the credit union-opposed IFPA bans interchange fees on the tax and gratuity portion of credit card transactions and prohibits the use or transfer of transaction data.
News of the filing was first reported by America’s Credit Unions.
The law affects all credit card transactions made within the state of Illinois; it is not dependent on where the financial institution is located.
With the attorney general’s cross appeal filed yesterday, America’s Credit Unions said it and the Illinois Credit Union League are evaluating options in the appeal ahead of the July 1 effective date of the IFPA.
As the CU Daily reported earlier, in a 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.
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
Judge Kendall upheld the interchange portions of the law, but granted relief to financial institutions from the data usage provisions. The judge upheld the interchange provisions, namely because financial institutions do not directly charge the interchange fee—the payment networks do—and therefore federal preemption does not apply, noted America’s Credit Unions.
America’s Credit Unions, the Illinois Credit Union League (ICUL), and other plaintiffs have filed an appeal seeking a declaratory judgment that the IFPA is preempted by federal law, and an injunction prohibiting state officials from applying or enforcing it.
