Court Ruling Saves Illinois from Total Credit Card Chaos Next Year

Halting untested state law necessary to safeguard consumers, small businesses, community financial institutions

WASHINGTON – The Electronic Payments Coalition (EPC) applauds the United States District Court in Chicago for granting a preliminary injunction for financial institutions regulated by the National Bank Act and Homeowners Credit Loan Act on the implementation of a controversial, first-in-the-nation state law that would have severely disrupted the credit card payment systems in Illinois.

“This court ruling is a critical victory for Illinois residents, small businesses and local financial institutions,” said Richard Hunt, Executive Chairman of the EPC. “While more needs to be done, this was a crucial step for payment security and helps prevent credit card chaos from taking over in Illinois next summer. We are relieved this unprecedented risky, experimental law is being partially delayed and its legality appropriately questioned. Hopefully, the same relief will be granted to credit unions, local banks and their customers early next year.”

The court’s decision comes after banking and credit groups filed a lawsuit seeking an injunction against the state’s law, which would have forced significant changes to how credit card payments are processed in the state effective July 2025. Federal regulators, including the Office of the Comptroller of the Currency (OCC), had previously warned that the law was “ill-conceived, highly unusual, and largely unworkable.” and would lead to “higher fees, reduced services, and weakened fraud protection” for consumers.

The Court will continue reviewing how the Illinois’ law is affected by the Federal Credit Union Act.

“This law clearly would have harmed Illinois consumers, burdened small businesses, and resulted in higher costs for everyone across the state,” continued Hunt. “It is clear that the only ones who stood to gain from this were the largest corporate mega-stores, who would have pocketed millions while consumers and small businesses would have been left to foot the bill.”

A study on the financial impact of the Illinois law revealed that while the top 10 corporate mega-stores in the state would have saved an annual average of $2.5 million, small businesses would have only saved an estimated $56 per year while incurring costly equipment upgrades and additional paperwork.

“While the largest corporate mega-stores like Amazon, Walmart, and Home Depot would have seen millions in benefits, small businesses would have been left with little more than the costly equipment upgrades and increased administrative fees,” Hunt explained. “This was never about helping consumers or small businesses. This was about boosting the bottom line of big corporations at the expense of the local economy.”

###