Overview
- The Office of the Comptroller of the Currency issued a notice of a pending order to override Illinois’ Interchange Fee Prohibition Act before it takes effect on July 1.
- The Illinois law would bar banks and card networks from charging interchange fees on the tax and tip portions of credit and debit transactions.
- A federal judge in February upheld the fee ban but blocked the law’s data‑use limit for national and out‑of‑state institutions, and the appeal is now before the Seventh Circuit with arguments expected in May.
- Illinois Attorney General Kwame Raoul urged the appeals court to keep the fee ban and restore the data rule, while banking groups say the act conflicts with federal authority and would hinder fraud prevention and routine processing.
- Illinois is the only state to pass such a ban, which carries $1,000 penalties per transaction for violations, leaving retailers, banks, and consumers uncertain about costs and card services ahead of the July deadline.