Illinois Attorney General Files Appeal to Protect State Law Limiting Swipe Fees
The appeal represents an important development in the ongoing fight to reduce swipe fees.
Oct 12, 2026 | 2 min read
On Friday, the Illinois Attorney General appealed a federal court’s June ruling that the Illinois Interchange Fee Prohibition Act (IFPA) should not stand because it is preempted by federal law. NACS strongly supports both the attorney general’s appeal and the IFPA.
“The Illinois Attorney General’s appeal of the U.S. District Court for Northern Illinois’s decision is a promising development,” said NACS General Counsel and Senior Vice President of Government Relations Doug Kantor. “Passage of the IFPA was an important boost to the fight against the credit card swipe fee pricing cartels. Ultimately, courts should find that the IFPA is not preempted by federal law.”
The IFPA is the nation’s first state law prohibiting interchange fees from being charged on the tax and tip portions of credit card transactions.
NACS for years has advocated that swipe fees should not be charged on the tax and tip amounts of credit card transactions, and the 2024 passage of the IFPA was a major victory. It was originally scheduled to take effect on July 1, 2026, before being delayed for one year by the Illinois legislature.
The U.S. District Court for Northern Illinois upheld core provisions of the IFPA against initial challenges in February 2026. However, the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA) changed longstanding regulations to allow third party price-fixing of fees for banks and credit unions in an effort to preempt the IFPA. The District Court then reversed itself and issued rulings deferring to the OCC and NCUA rules.
The Illinois Attorney General is now challenging the District Court’s latest decision.
“The credit card industry shouldn’t swipe tax or tip dollars out of the hands of local businesses who are just doing their duty to the state or their employees,” said Kantor. “We are pleased that Illinois is taking a stand against the banking regulators’ illegal actions. Regulations that allow price-fixing by the credit card industry hurt Main Street businesses and their customers.”
Swipe Fees
