On February 6, 2025, the U.S. District Court of the Northern District of Illinois declined to issue a preliminary injunction to stop an Illinois “swipe fee” law that would ban certain credit and debit card fees from applying to credit unions while extending a previous preliminary injunction to apply to out-of-state banks. (See our previous coverage of this litigation here, here, and here). Continue Reading Illinois ‘Swipe Fee’ Law Faces Continued Pushback as Court Partially Extends Injunction
On December 20, 2024, an Illinois federal court, in considering a motion for a preliminary injunction brought by the Illinois Bankers Association, American Bankers Association, and other trade groups, ruled that national banks and federal savings associations will not be subject to Illinois’ groundbreaking law that, starting on July 1, 2025, would forbid card issuers, payment card networks, acquirer banks and payment processors from charging retailers for swipe fees on gratuities and “any use and occupation tax or excise tax” imposed by the State or a local government. (See here and here for our previous discussions on the law).Continue Reading Banks Win Temporary Reprieve from Novel Illinois Swipe-Fee Law
The banking industry’s efforts to challenge a new Illinois law banning interchange fees, also known as “swipe fees,” on tax and tip payments gained significant momentum when the OCC criticized the law as an “ill-conceived” threat to the “efficient and effective” operation of the banking system in an amicus brief filed in Illinois federal court on October 2. Continue Reading Swipe Fee Saga Continues: OCC and Trade Groups Clash with Illinois AG
On August 5, a prominent investment brokerage firm disclosed in a quarterly filing that it has been responding to requests from the SEC since April related to the firm’s practice of sweeping uninvested customer account balances into interest-bearing deposit programs at affiliate banks in order to generate income. This disclosure comes on the heels of the firm being named in two separate class action lawsuits earlier this year, both alleging that the firm breached customer agreements and its fiduciary duties to account holders by failing to pay reasonable interest rates on cash balances swept to affiliate bank deposit programs.Continue Reading Scrutiny of Cash Sweep Programs Intensifies as Brokers Face Wave of Class Action Suits
Illinois has become the first state to enact restrictions on credit and debit card interchange fees – commonly known as swipe fees – linked to taxes and gratuities. The Interchange Fee Prohibition Act (the “Act”), embedded as Section 150-10 of the state’s latest revenue bill, signed on June 7 by Governor J.B. Pritzker, aims to accommodate retailers who have long contested the fairness of these fees. The Act forbids card issuers, payment card networks, acquirer banks and payment processors from charging retailers for swipe fees on gratuities and “any use and occupation tax or excise tax” imposed by the State or a local government. The Act will become effective in July 2025.Continue Reading Swipe Fee Showdown: Illinois Passes Novel Payments Law