Illinois’ Interchange Fee Prohibition Act (IFPA) passed in June 2024 and scheduled to take effect July 1, 2026. It would stop payment card networks and issuers from charging interchange (“swipe”) fees on the tax or tip portion of a purchase. The law also included a “data usage limitation” restricting how transaction data could be shared or used beyond processing the payment or as required by law.
In February 2026, U.S. District Judge Virginia Kendall issued a mixed ruling. She allowed the IFPA’s fee ban on state/local taxes and gratuities to stand (finding it is not preempted by the National Bank Act) but permanently blocked the law’s limits on how banks may use transaction data.
America’s Credit Unions (ACU), the Illinois Credit Union League (ICUL), and other plaintiffs appealed to the U.S. Court of Appeals for the Seventh Circuit. The court has put the case on a fast track, with oral arguments expected in mid-May and a decision projected by June 15, 2026—just ahead of the July 1 effective date.
The Illinois Attorney General filed a reply brief April 3, 2026, urging the court to uphold the fee ban and signaling potential next steps related to the portions of the law previously blocked.
Federal agencies are also weighing in. The Office of the Comptroller of the Currency (OCC) filed an amicus brief and issued an interim final rule asserting the IFPA is preempted because it interferes with national banks’ ability to receive compensation for services. Reports also indicate the National Credit Union Administration (NCUA) is considering a similar preemption order, and the White House is reviewing a possible executive order.
The Nebraska Credit Union League is supporting ACU and ICUL’s efforts to encourage NCUA to move forward with preemption. If implemented, the IFPA could create significant compliance challenges nationwide—because a card used in Illinois by any member could trigger compliance requirements for that member’s credit union in another state.
