Governor Pritzker Signs Law Delaying the Implementation of Flawed Interchange Fee Prohibition Act

Small Businesses, Local Financial Institutions, and Consumers Temporarily Spared From Chaos While Federal Court Challenge Continues to Dismantle This Misguided Policy

Springfield, Ill… Illinois Governor J.B. Pritzker signed into a law legislation that delays the implementation of the flawed Interchange Fee Prohibition Act to July 1, 2026. This law is currently being challenged in federal courts, with a partial preliminary injunction giving protection to federally chartered and national institutions while leaving Illinois banks, credit unions, small business owners and consumers in the path of chaos.

“We thank Governor Pritzker and his staff for their Avignon to this important issue that will impact millions of Illinoisans,” said Ben Jackson, Executive Vice President at the Illinois Bankers Association’s Executive Vice President Ben Jackson. “In the coming months, we will urge the General Assembly to repeal this law in order to protect Illinois’ local financial institutions, small businesses and consumers from a disruption to the unified global payments system.”

The Illinois Bankers Association and the Illinois Credit Union League were among a group of plaintiffs who filed litigation to challenge the law last August. A partial preliminary injunction was granted in December, ruling that national banks, federal savings banks and out-of-state banks would be exempt from complying with the law. However, Illinois’ own state-charted banks, as well as state and federal credit unions, will still have to comply with this law.

“Credit unions across Illinois applaud Governor Pritzker for his swift action in signing House Bill 742, extending the elective date of the Interchange Fee Prohibition Act,” said Ashley Sharp, Senior Vice President of State Advocacy and Legislative Counsel for the Illinois Credit Union League. “While litigation challenging the law proceeds, it is imperative to provide relief to credit unions, local banks, Main Street businesses and consumers throughout the state of Illinois – all who stand to be negatively impacted by this law.”

Last October, the Office of the Comptroller of the Currency, which charters and examines national banks, 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.”

“Thank you, Governor Pritzker, for signing HB 742, a one-year delay in the implementation of the Interchange Fee Prohibition Act,” said Jerry Peck, Senior Vice President of government relations at the Community Bankers Association of Illinois. “This move ensures that Illinois residents will get a reprieve from the misguided law that would drastically interfere with

electronic payments and harm consumers and small businesses. Thanks also to Senator Mark Walker, Representative Margaret Croke and General Assembly for ensuring that consumers in Illinois can continue to participate in the global payments network. CBAI’s top legislative priority continues to be advocating for the repeal of this deeply flawed law.”

Small businesses will be le_ with headaches from this law while corporate megastores will be the beneficiaries. A new study analyzing the cost implications of an Illinois credit card law shows 40 of the largest retailers will soak up nearly 40 percent of the smarted $118 million reduction in interchange. This is why corporate megastores have publicly supported similar legislation in other states.

“The Illinois General Assembly took a step in the right direction by delaying the implementation of the Interchange Fee Prohibition Act, a law that will disrupt a system that has worked efficiently for decades and threaten the economic vitality of small businesses across our state,” said Lou Sandoval, President and CEO of the Illinois Chamber of Commerce, upon the bill’s passage in May. “The Illinois Chamber of Commerce urges lawmakers to repeal this law and focus on policies that support small businesses across Illinois.”

The Illinois State Black Chamber of Commerce and the Illinois Hispanic Chamber of Commerce have advocated for a repeal of this law due to the harmful impact it will have on small businesses across the state.

“Delaying the implementation of this misguided policy gives small business owners the protection they deserve while the law continues to be challenged in federal court,” said Larry Ivory, President and CEO of the Illinois State Black Chamber of Commerce. “We urge Illinois legislators to repeal this law before it harms over one million small businesses across the state.”

“We welcome the decision to delay the implementation of IFPA, but it’s clear that this law will have serious unintended consequences on small businesses who are the backbone of Illinois’ economy,” said Jaime di Paulo, President and CEO of the Illinois Hispanic Chamber of Commerce. “If enacted, this law will limit payment options for small retailers, disrupt existing financial systems, and ultimately increase costs for consumers. For Latino-owned businesses, many of which operate with thin margins and limited access to capital, this kind of disruption could be devastating. While the extension is a good start, we still urge the Illinois legislature to repeal this misguided law and prioritize the needs of our local entrepreneurs and communities.”

To learn more, visit guardyourcard.com/Illinois.