Springfield Delays Swipe Fee Law for Second Time After Bankers Push Back

Originally set to take effect on July 1, 2025, the Interchange Fee Prohibition Act (IFPA), which will prevent financial institutions and payment card networks from charging or retaining interchange fees on the tax and gratuity portions of credit and debit card transactions, has been pushed back by Illinois lawmakers another year for an effective date of July 1, 2027. This is the second time the IFPA has been delayed. Since its passage in May 2024, the IFPA has been widely debated, with the banking industry challenging it in the courts and in Springfield, and the retail industry claiming it will save merchants and restaurants money.

Electronic Payments Coalition Executive Chairman Richard Hunt opines that the latest delay is an “acknowledgment that lawmakers rushed through a deeply flawed law without fully understanding its consequences,” that a delay will not fix the “chaos,” and that “the only real solution is full repeal.” Alternatively, the Merchants Payments Coalition said that the delay is already costing retailers money and that the IFPA would save Illinois businesses and customers over $500 million a year.

On Monday, June 1, 2026, Judge Virginia Kendall of the Northern District of Illinois granted a permanent injunction preventing enforcement of the IFPA against national banks, banks chartered by states other than Illinois, credit card networks, and federal savings associations, writing that the IFPA does “impose an undue burden on the performance of the banks’ functions.”

This follows the U.S. Office of the Comptroller of the Currency’s (OCC) April 2026 proposal of a rule protecting federally chartered banks from the IFPA. The injunction does not apply to Illinois banks, credit unions, or savings banks, potentially setting up further litigation at the Seventh Circuit Court of Appeals. Retailers who support the law have said these federal actions undermine President Donald Trump’s desire to limit fees charged by credit card companies.

As the matter makes its way through the courts, the banking industry has been lobbying lawmakers in Springfield for a full repeal. Bankers claim the law will upend the payment ecosystem across the state. The Electronic Payments Coalition has launched an advertising campaign to make its arguments to consumers. The banks also say the law leaves them responsible for guaranteeing payment of an entire customer bill while only being compensated for part of it.

If you have questions about the Interchange Fee Prohibition Act, its delay, or its implications, contact the qualified attorneys at Rock Fusco & Connelly, LLC.