South Central Reporter

The federal government has intervened in a legal challenge concerning a recent Illinois law that may alter the handling of transaction fees by banks and credit unions. The U.S. Office of the Comptroller of the Currency has submitted an amicus brief supporting litigation against the Illinois Interchange Fee Prohibition Act.

Enacted earlier this year, the law would be unprecedented in prohibiting banks from imposing interchange fees on taxes and tips. Critics argue that this measure could cause complications for both retailers and consumers, suggesting it might necessitate two separate card swipes—one for purchases and another for sales tax. Federal officials assert that the legislation infringes upon their regulatory authority and poses a risk to “safe and sound banking” by disrupting fees essential for covering transaction costs and fraud protection.

The case is scheduled to be heard in court on October 30th.