Illinois legislators voted June 1 to push the Interchange Fee Prohibition Act (815 ILCS 151) effective date to July 1, 2027, the second annual delay since the law was signed in June 2024. SB3645 goes to Governor Pritzker, who is expected to sign.
The IFPA bars banks and credit card companies from collecting interchange fees on the sales tax and tip portions of a transaction. Four trade groups challenged the law almost immediately: the Illinois Credit Union League, America’s Credit Unions, Illinois Bankers Association, and American Bankers Association are all in the litigation. Last year’s delay ran from July 2025 to July 2026; this one pushes to July 2027.
The OCC’s interim final order (Bulletin 2026-17), published April 24, preempts the IFPA for national banks and federal savings associations. The NCUA is building a parallel rule for federal credit unions. America’s Credit Unions called the delay a win for consumers, while the four banking associations noted in a joint statement that a 2027 effective date still leaves state-chartered credit unions and community banks at a disadvantage against preempted federal peers.
If the OCC and NCUA preemption framework holds, the IFPA’s practical reach narrows to state-chartered institutions. That’s the structural problem: the law’s biggest targets, the national banks and credit card companies driving most interchange revenue, would be exempt. The Merchants Payments Coalition pegs the delay’s cost at $500 million for Illinois consumers and businesses. But a law that exempts the institutions generating most of that interchange may not deliver the consumer relief Illinois retailers were promised.
Whatever 2027 resolves, it’s heading back to court first.
Worth reading Bulletin 2026-17 before your next swipe-fee compliance filing.
Rebecca Lauren