A first-in-the-nation law that would prohibit banks and credit card companies from charging swipe fees on tips and taxes survived a major hurdle in court Tuesday, but opponents vow it will not be the last challenge.
Financial institutions including the Illinois Bankers Association and Illinois Credit Union League filed a lawsuit against the Interchange Fee Prohibition Act in late 2024, arguing it would create an overly complex and burdensome payments system for debit and credit card purchases.
However, U.S. District Judge Virginia Kendall upheld the law, creating a tight time frame for Illinois businesses to set up processes for compliance ahead of the July 1, 2026 deadline.
Implementation of the law has already been pushed back by a year to allow time for the legal dispute to be resolved.
