WASHINGTON--The Illinois Attorney General filed a cross-appeal seeking to overturn the injunction on the data use provisions in the Illinois Interchange Fee Prohibition Act (IFPA), America's Credit Unions reported.
The IFPA bans interchange fees on the tax and gratuity portion of credit card transactions and prohibits the use or transfer of transaction data. The law affects all credit card transactions made within the state of Illinois; it is not dependent on where the financial institution is located.
A judge earlier this month upheld the interchange portions of the law, but granted relief to financial institutions from the data usage provisions. The judge upheld the interchange provisions, namely because financial institutions do not directly charge the interchange fee—the payment networks do—and therefore federal preemption does not apply, ACU said.
America’s Credit Unions, the Illinois Credit Union League (ICUL), and other plaintiffs filed an appeal seeking a declaratory judgment that the IFPA is preempted by federal law, and an injunction prohibiting state officials from applying or enforcing it.
"With the attorney general’s cross appeal filed yesterday, America's Credit Unions and the Illinois Credit Union League are evaluating options in the appeal ahead of the July 1 effective date of the IFPA," ACU said.
America’s Credit Unions’ compliance team has a full breakdown of what the IFPA would mean for credit unions in a recent Compliance Blog entry and there are interchange resources available for members in the Resource Library.