Fate of Illinois’ first-in-the-nation credit card ‘swipe fee’ ban awaits judge’s ruling

CHICAGO — A law that would make Illinois the first jurisdiction in the world to ban financial institutions from charging “interchange fees” on the tax and tip portions of debit and credit card transactions finally got its day in court this week nearly 18 months after its passage.

U.S. District Judge Virginia Kendall’s ruling — expected in the coming weeks — will determine the legality of the “Interchange Fee Prohibition Act,” which was folded into Illinois’ Fiscal Year 2025 budget package in May 2024 by Democrats who control the General Assembly.

The move was championed by the Illinois Retail Merchants Association, which positioned the law as pro-consumer, as retailers often pass the fees onto customers. But other business groups, which are typically aligned with IRMA, balked at the idea