An Illinois federal judge ruled Friday that credit card companies like Visa and Mastercard must comply with Illinois’ landmark law restricting certain credit card fees. However, she also held that national banks and federal savings associations are not subject to the law, at least for now.
U.S. District Judge Virginia M. Kendall partially granted a preliminary injunction temporarily halting enforcement of the Illinois Interchange Fee Prohibition Act against the banks and savings associations. She found that they are likely to prevail with their argument that the National Banking Act preempts the law’s interchange fee prohibition and its data usage limitation provision.
Similarly, the judge said they demonstrated a likelihood of success on the merits of their argument that the law’s data usage limitation “violates the rights of national banks and is preempted by the NBA.”
However, Judge Kendall ruled that the preemptive effect of the National Banking Act’s provision of rights to national banks “does not extend to other, non-national bank or savings associations participants in credit and debit card transactions, including card networks like Visa or Mastercard.”
