The Electronic Payments Coalition (EPC) has filed an amicus brief with the U.S. District Court of the Northern District of Illinois, supporting a lawsuit initiated by several banking and credit union associations against a new Illinois law that alters credit and debit card processing in the state.
The plaintiffs in the lawsuit include the Illinois Bankers Association, Illinois Credit Union League, American Bankers Association, and America’s Credit Unions. They argue that the new law is preempted by federal regulations designed to prevent fragmented regulatory systems across states. The EPC's brief supports this view, stating that the law allows Illinois to benefit from the electronic payment system without compensating issuing banks for their services and risks.
Richard Hunt, Executive Chairman of EPC, emphasized the importance of electronic payments in modern commerce. "Our modern economy is built on and dependent upon electronic payments," he said. "This system, because it is both hassle-free and secure, is often taken for granted." Hunt added that readily available electronic payments have enabled small businesses to compete with larger corporations but warned that the new Illinois law threatens this balance by creating complications predominantly affecting smaller businesses.
The contested provision in the Illinois state budget exempts tax and tip portions of transactions from interchange fees—a move rejected by over two dozen other state legislatures. Currently unique to Illinois, this law would require separate transactions for taxes and tips or necessitate cash tips and itemized purchase records for consumers.
A copy of EPC’s amicus brief was included with their filing.
---