She largely rejected the Illinois attorney general’s request to throw out the suit, only agreeing to dismiss the banking trade groups’ state law claims.
The first-of-its-kind law bans the collection of interchange fees to compensate for the cost of processing card transactions on any sales taxes, excise taxes, and gratuities included in a consumer’s credit or debit card transaction with a merchant in the state.
Merchants argue that the measure would save them millions in fees for handling tax and tip money that belongs to others, such as the government or employees. However, banking industry groups contend the law violates multiple federal laws and cannot be enforced against federal and state-chartered financial institutions or their payment card networks and service providers.
The suit was filed in August by the American Bankers Association, Illinois Bankers Association, America’s Credit Unions, and the Illinois Credit Union League. It names Illinois Attorney General Kwame Raoul as the defendant.
