(The Center Square) – Gov. J.B. Pritzker says he hopes the federal government does what’s best for consumers and businesses as a Treasury Department agency moves to preempt an Illinois law banning swipe fees on the tax and tip portions of credit and debit card transactions.
The U.S. Department of the Treasury’s Office of the Comptroller of the Currency released notice Wednesday of a pending order to preempt the Illinois Interchange Fee Prohibition Act, meaning the Trump administration is considering stepping in to stop the law and allow the fees.
Pritzker was asked on Thursday about the federal government’s potential intervention.
“I don’t know about interference. I think they’re they’re trying to figure out how to make the system work. We think that what was passed here works,” Pritzker said.
The IFPA was signed by Pritzker in June 2024 and is scheduled to take effect July 1.
“I think the federal government’s going to, you know, examine, it. I hope they’ll do what’s best for the consumer in the end, and also what’s best for industry,” Pritzker said.
In October 2024, the Office of the Comptroller of the Currency filed an amicus brief stating that the IFPA “is an ill-conceived, highly unusual and largely unworkable state law,” and “it is likely that fraud risk would increase significantly, consumer services would be constrained, and public trust would decline.”
Illinois Bankers Association Executive Vice President Ben Jackson said oral arguments are scheduled in the Seventh Circuit Court of Appeals on May 13 to appeal a district court ruling in February that upheld the ban.
Jackson wants the law repealed before it takes effect.
“Local banks and credits unions, we would remind everyone, they’re small businesses, too. This is going to reduce their ability to provide access to credit and benefits to their communities,” Jackson said.
Illinois Credit Union League President and CEO Libby Calderone said the IFPA requires the tax and tip portion of electronic payments to be processed for free.
“The IFPA also imposes steep penalties for noncompliance, $1,000 per transaction,” Calderone said.
Illinois is the only state to have passed legislation prohibiting swipe fees on taxes and tips.
The Illinois Retail Merchants Association supports the law and said the Office of the Comptroller of the Currency failed to explain its reasoning about the preemption notice or allow public review.
“It’s clear the goal is an end run around the legal process after a judge recently upheld the law,” IRMA President and CEO Rob Karr said.
