Notably, Judge Kendall said Friday that the state law appears at odds with federal statutes, saying the interchange fee prohibition “threatens to undermine Congress’s creation of a national banking system.”
“A state law — which imposes such a limitation on a national bank’s power — is also at odds with how Congress intended the NBA would operate, according to its legislative history,” the judge said.
She also agreed with the groups that the Federal Credit Union Act likely preempts the Illinois law.
“There is a threshold question, however, which neither party explicitly raised, pertaining to the FCUA — whether a private right of action exists for Illinois Bankers to bring their FCUA claim,” she said.
The judge ordered supplemental briefing on that question.
Overall, Judge Kendall said the trade groups have sufficiently, at this stage, established that they’ll suffer irreparable harm without a preliminary injunction.
“The alleged cost of compliance would likely be more crippling for some Illinois financial institutions than the state claims,” Judge Kendall said. She added that, likewise, “leadership from the American Bankers Association, which represents over 1,100 branches in Illinois, explained that some of their members would likely cease providing credit and debit card services and no longer be able to serve as acquiring banks to merchants, as they prepare for the July 1 deadline.”
