SPRINGFIELD -– A retail business advocate says a federal judge’s ruling to uphold the Interchange Fee Prohibition Act paves the way for Main Street Illinois to experience major relief, but a banking advocate warns the law could slow commerce and disrupt transactions.
U.S. District Court Judge Virginia Kendall ruled Tuesday that the law banning processing fees on the tax and tip portion of credit and debit card transactions could be implemented as scheduled on July 1. Illinois Retail Merchants Association President and CEO Rob Karr said removing the pressure of swipe fees on prices will be “the largest single relief package for Main Street retail in Illinois.”
Ben Jackson, executive vice president of the Illinois Bankers Association, said the law is an anomaly and “it’s going to slow down the speed of commerce, foul up transactions. There’s still a lot of unknowns here in terms of how online transactions are handled.” He said plaintiffs, including the Illinois Credit Union League and the American Bankers Association, would ask the Seventh Circuit Court of Appeals for an expedited case. “The effective date of this law is coming up very quickly, in just a few months time. Certainly, no one is ready for this,” Jackson said.
Although other state legislatures have introduced similar measures, Illinois remains the only state to have passed legislation prohibiting swipe fees on taxes and tips. Illinois U.S. Sen. Dick Durbin filed amicus briefs supporting the law in 2024 and 2025.
Electronic Payments Coalition Executive Chairman Richard Hunt called the law “reckless” and said it must be repealed before it “inflicts credit card chaos on small businesses and consumers across the state.”
Karr disputed suggestions the new law could cause chaos, saying, “They stopped making those arguments with the legislature because they were found to be so uncredible. Furthermore, their own experts in the court case did not use those arguments, because they know they’re not credible.” He added that credit card companies and processors have had two years to prepare for implementation on July 1. “This is simple math. This should not be difficult,” Karr said.
