Originally set to take effect on 1 July 2025, the measure will now be delayed by one year, with the new effective date moved to 1 July 2026.
The delay follows legislative approval of a brief amendment, passed by both chambers over the weekend. While the state’s governor has yet to confirm whether he will sign the amended bill, the alignment of the executive branch and legislature under Democratic control suggests support is likely.
The law, known as the Interchange Fee Prohibition Act, was enacted in 2023 and has been backed by restaurant and retail industry groups aiming to reduce the costs associated with card-based payments. Merchants have long argued that paying fees on amounts collected for taxes and gratuities unfairly increases their expenses.
Opponents from the banking and payments sectors welcomed the delay. Industry associations such as the Electronic Transactions Association (ETA) and the Electronic Payments Coalition publicly supported the amended timeline. According to representatives from the ETA, the postponement offers additional time to resolve legal disputes that could ultimately lead to the law’s repeal.
Legal opposition to the law remains ongoing. In August 2024, several financial trade groups, including the Illinois Bankers Association and the American Bankers Association, filed a lawsuit in federal court aiming to overturn the legislation. A US District Court judge in Illinois issued a preliminary injunction in December that temporarily blocks enforcement of the law for national and out-of-state banks, as well as federal savings associations. As a result, most card transactions in the state are not currently subject to the statute.
Officials from the ETA have argued that if only a small portion of the law is ultimately upheld, it would place Illinois-chartered financial institutions at a competitive disadvantage, an outcome they claim was not intended by the state legislature.
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