The Illinois General Assembly has decided to delay the implementation of the Illinois Financial Protection Act (IFPA), a move that has been met with criticism from various stakeholders. Richard Hunt, Executive Chairman of the Electronic Payments Coalition, expressed his concerns following the decision.
"The General Assembly delayed credit card chaos for every state-chartered bank, credit union, small business and cardholder in Illinois," Hunt stated. He emphasized that while the delay is a temporary measure, it does not address the underlying issues. "A delay, however, is far from a fix. The only true solution is a full repeal of this draconian law."
Hunt highlighted that even though the IFPA has not yet taken effect, it is already imposing costs on Illinois taxpayers due to ongoing legal battles. These legal challenges stem from claims that the law conflicts with federal banking regulations.
"Make no mistake, the chaos and litigation which has ensued since the law was passed is completely self-inflicted," he added.
Hunt warned other state legislatures about potential repercussions if they consider similar measures that could disrupt established payment systems. "This should be a red flag for every state legislature considering kowtowing to the corporate mega-stores – at the expense of state chartered financial institutions, their customers and small businesses – by upending our safe, secure, efficient global payment system."
He also called on Congress to recognize these risks when enacting legislation affecting payment systems without thorough examination. "Congress, too, should take note of the dangers caused by passing legislation placing new mandates on our trusted payment systems without hearings, debate or review."
The IFPA was initially passed last year without any debate or hearing during Memorial Day weekend. It proposed changes such as separating tax and tip portions from interchange fees but faced criticism for lacking a clear implementation framework.
In conclusion, Hunt suggested investing in new technologies and establishing national data security standards as more effective solutions for strengthening payment systems.