Court blocks controversial Illinois credit card law after industry backlash

The Electronic Payments Coalition (EPC) has expressed approval of a recent decision by the United States District Court in Chicago. The court granted a preliminary injunction concerning a new state law in Illinois that would have significantly altered credit card payment systems starting July 2025. This ruling affects financial institutions regulated by the National Bank Act and Homeowners Credit Loan Act.

Richard Hunt, Executive Chairman of the EPC, commented on the decision: “This court ruling is a critical victory for Illinois residents, small businesses and local financial institutions.” He emphasized the importance of this step in maintaining payment security and preventing disruption within Illinois. Hunt added, “We are relieved this unprecedented risky, experimental law is being partially delayed and its legality appropriately questioned.”

The lawsuit against the state's law was initiated by banking and credit groups who sought to prevent its implementation. Federal regulators, including the Office of the Comptroller of the Currency (OCC), had criticized the law as "ill-conceived, highly unusual, and largely unworkable." They warned it could lead to increased fees, reduced services, and weaker fraud protection for consumers.

The court's ongoing review will consider how this state law interacts with federal regulations such as the Federal Credit Union Act. Hunt further explained: “This law clearly would have harmed Illinois consumers, burdened small businesses, and resulted in higher costs for everyone across the state.”

A study examining the financial implications of the proposed Illinois law found that while large corporate stores could save millions annually, small businesses faced minimal savings alongside costly upgrades. Hunt pointed out that corporations like Amazon, Walmart, and Home Depot stood to benefit significantly from these changes at the expense of smaller entities.

In conclusion, while acknowledging more work needs to be done to secure payments nationwide, EPC advocates for investing in technology and national data security standards as solutions for strengthening payment systems.