What People Are Saying About Illinois’ Credit Card Chaos: OCC Edition

WASHINGTON, DC— An amicus brief filed yesterday by the Office of the Comptroller of Currency (OCC) highlights the glaring flaws in a new credit and debit card law set to take effect on July 1, 2025 in Illinois. This hastily passed law to carve tax and tip out of interchange processing costs will only benefit the pockets of the corporate mega-retailers while creating chaos at the register with little to no savings for millions of small businesses.

“The OCC said it best, the new Illinois law is ‘ill-conceived, highly unusual and largely unworkable’ and would lead to ‘higher fees, reduced services, and weakened fraud protection,’” said Richard Hunt, Executive Chairman of the Electronic Payments Coalition.

What the OCC said in its opposition to Illinois’ new law:

• “The Illinois Interchange Fee Prohibition Act, H.B. 4951, Section 150 (“IFPA”) is an ill-conceived, highly unusual, and largely unworkable state law that threatens to fragment and disrupt this efficient and effective system.”

• “The IFPA prevents or significantly interferes with federally-authorized banking powers that are fundamental to safe and sound banking and disrupts core functionalities that drive the Nation’s economy. In short, the IFPA constitutes both bad policy and an unlawful interference with federally granted powers.”

• “If the IFPA is not enjoined and invalidated, it may well trigger a domino effect of other states and localities enacting similar laws, thereby creating a fractured, highly inefficient, and unworkable payment system that would materially affect interstate commerce. The result would be an unmanageable patchwork of state laws that undermine the uniformity necessary for the smooth and effective functioning of the national payment system.”

• “If the interchange fee prohibition provision in the IFPA is not invalidated, it will erode this essential infrastructure, leaving national banks with extraordinary operational burdens that likely will be passed on to consumers in the form of higher fees, reduced services, and weakened fraud protection.”

• “If the IFPA is allowed to remain in effect, it is likely that fraud risk would increase significantly, consumer services would be constrained, and public trust would decline.”