SPRINGFIELD, Ill.– The Illinois General Assembly has passed a one-year delay of its controversial Interchange Fee Prohibition Act, which removed interchange fees on tax and tip portions of transactions. The legislation was strongly opposed by credit unions.

The bill now goes to the governor with a 30-day deadline.

DCUC Issues Statement

In a statement, the  Defense Credit Union Council (DCUC) stated that interchange fees are not a profit center for CUs and help fund fraud detection, cybersecurity, transaction processing, and the “convenience that consumers expect when they use a credit or debit card. When lawmakers interfere with this system, it’s not the big banks or mega-retailers who pay the price — it’s the credit unions and the members they serve.”

“Credit unions serve millions of everyday Americans, including military families, veterans and retirees, young students and service members, and small business owners,” DCUC added. “Many of these communities rely on low- or no-fee checking accounts, affordable credit options, and financial education — all of which would be greatly reduced with interchange legislation such as the IFPA.”

Added Jason Stverak, chief advocacy officer with the DCUC, “Lawmakers should be very clear-eyed about who this law benefits — and who it harms. This is not about consumer protection; it’s about increasing the profit margins of the largest retailers at the expense of community-based financial institutions.”

‘Do What’s Right’

Anthony Hernandez, DCUC President/CEO, said the IFPA disrupts a secure, reliable payment system and threatens to pass the burden onto consumers through reduced services, fewer protections, and higher costs.

“We urge the General Assembly to do what’s right and repeal the IFPA in full. And we call on lawmakers nationwide — including all of Congress — to reject harmful interchange mandates that put financial access and security at risk for millions of credit union members across the country,” said Hernandez.

As the CU Daily reported earlier, the legislation has been opposed by the Illinois CU League.