Breaking Update: Illinois Interchange Litigation

Last week, the Court granted a preliminary injunction in part, recognizing a strong likelihood of success under the National Bank Act and Home Owners' Loan Act, effectively pausing the implementation of the Illinois Interchange Fee Prohibition Act (IFPA) for national banks and federal savings associations. However, the Court deferred judgment on the Federal Credit Union Act (FCUA), requesting additional evidence by January 15 to determine its applicability. While claims involving Illinois state-chartered institutions were dismissed due to sovereign immunity, efforts to include them continue, as their exclusion places these institutions at a disadvantage. Additionally, the Court ruled that preemption does not apply to payment networks like Visa and Mastercard. Financial institutions welcomed the ruling, emphasizing its role in preventing disruption to the payments system and expressing confidence in extending relief to all institutions through further litigation.

CCUA will continue monitoring the Illinois lawsuit while working proactively to deter and prevent any interchange legislation proposal in our states.