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(The Center Square) – An Illinois law banning banks and credit card companies from charging swipe fees on taxes and tips continues to play out in court. A U.S. District Court judge has issued a ...
An Illinois law that goes into effect in 2025 seeks to bar interchange fee collection on taxes and tips, which sparked a legal fight with the banks. Illinois Bankers Association v.
The law prohibits a credit card holder’s bank from charging or receiving interchange fees on portions of transactions, including taxes and gratuities. It is scheduled to go into effect July 1.
Richard Durbin, the senator from Illinois who was the main proponent of those rules, has called the proposed settlement on credit card swipe fees, "gives Visa and MasterCard free rein to carry on their anti-competitive swipe-fee system with no real constraints and no legal accountability. This is not a settlement I would agree to.
The Durbin amendment, implemented by Regulation II, [1] is a provision of United States federal law, 15 U.S.C. § 1693o-2, that requires the Federal Reserve to limit fees charged to retailers for debit card processing.
Maryland’s House Bill 29, introduced in January, would prohibit credit card networks from charging “swipe fees” on sales tax, which cost merchants in Maryland $156.9 million in 2023 alone.
On November 8, 2016, Illinois voters approved the Illinois Transportation Taxes and Fees Lockbox Amendment, a legislatively referred constitutional amendment that prohibits lawmakers from using transportation funds for anything other than their stated purpose.
Aside from interchange or swipe fees, which Visa and Mastercard force retailers to pay to issuing banks, the two credit card giants charge network fees to merchants.