Court issues partial injunction against Illinois law restricting interchange fees

A federal judge on Friday ordered a preliminary injunction against enforcement of an Illinois state law restricting interchange fees for national banks and federal savings associations but left the law in effect for Illinois-chartered institutions and credit card networks for now.

The order also leaves the law in effect for out-of-state banks and federal credit unions until the court can review the legal arguments in more detail.

The Illinois Interchange Fee Prohibition Act bans banks, payment networks and other entities from charging or receiving interchange fees in Illinois on the portion of a debit or credit card transaction attributable to tax or gratuity. In August, the American Bankers Association, Illinois Bankers Association and other groups challenged the law in U.S. District Court for the Northern District of Illinois, arguing it violates multiple federal statutes, including the National Bank Act and the Federal Credit Union Act. The OCC filed a rare amicus brief in October in support of the associations’ position.