The Biden administration is asking a federal judge to halt Illinois’ first-in-the-nation law curtailing credit card “interchange fees” before it goes into effect next summer.
When fully implemented in July 2025, the law will curtail banks’ ability to charge those fees on the tax and tip portion of debit and credit card transactions.
After a coalition of financial institutions sued over the law in federal court this summer, federal officials this week sided with the banks. The Office of the Comptroller of the Currency – an independent bureau within the U.S. Department of Treasury – wrote in a legal brief that Illinois’ law is both “bad policy” and in conflict with federal law.
The filing, published Wednesday, frames interchange fees as a “core feature of an intricately designed nationwide payments system.”
“The Illinois Interchange Fee Prohibition Act is an ill-conceived, highly unusual, and largely unworkable state law that threatens to fragment and disrupt this efficient and effective system,” the brief said. “Although the IFPA’s requirements are vague and ambiguous in many respects, this much is clear: the IFPA prevents or significantly interferes with federally-authorized banking powers that are fundamental to safe and sound banking and disrupts core functionalities that drive the Nation’s economy.”
The law, which Gov. JB Pritzker and Democrats in the General Assembly approved as part of the state’s budget process earlier this year, was a concession to the Illinois Retail Merchants Association. Retailers had been opposed to the governor’s proposed cap on a tax deduction historically granted to them for collecting the state sales tax.
IRMA leaders defended the law last week, while Pritzker on Thursday said the Biden administration’s filing was “not something that I’m deeply concerned about.”
“When things get brought to court, you never know how they’ll turn out,” he said at an unrelated event. “I think this one is one that can be defended well and we’ll end up with the law we have on the books being affirmed.”
Pritzker’s Japan trade mission
Pritzker is also set to join state legislative and business leaders on a trade mission to Japan next week to explore clean energy, manufacturing, life sciences, quantum, and other “key growth industries,” according to the governor’s office.
Members of the delegation will meet with their counterparts in Tokyo to discuss strengthening economic ties between the state and the island nation.
The delegation represents what the governor’s office calls “Team Illinois” – a group of government and business officials that work to secure business and economic development partnerships. While it started informally, it’s now a key element of the Pritzker administration’s five-year plan for attracting businesses to the state.
In total, about four dozen lawmakers, economic development officials, academics and businesspeople will join the governor on the trip. Among them are House Speaker Emanuel “Chris” Welch, D-Hillside, and Senate President Don Harmon, D-Oak Park.
Christy George, the CEO of Intersect Illinois, is also joining the delegation. Intersect Illinois is the private economic development organization started by then-Gov. Bruce Rauner that has since become a go-between for businesses looking to relocate to Illinois and state government. It works on marketing and site selection in partnership with the state’s Department of Commerce and Economic Opportunity.
George stepped into the role in mid-September after working as the executive director of the Democratic National Convention’s 2024 Host Committee. Prior to that, George worked in Pritzker’s administration as an assistant deputy governor and as the executive director of the Illinois Commerce Commission.
Others heading to Japan include representatives of PsiQuantum and TCCI, both of which have received multimillion-dollar tax incentives from DCEO since last summer. The heads of the state’s major utilities, representatives from the University of Illinois and University of Chicago, and heads of several business-related lobbying organizations are also set to join the delegation.
The Pritzker administration has led similar trade missions to the United Kingdom and Canada in recent years. The governor’s first trade mission, in 2019, was also in Japan.
Since then, Illinois exports to Japan have increased 31.7% while imports from Japan have fallen 22.4%, according to the governor’s office.
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
The post Capitol Briefs: Federal agency opposes new state law; Pritzker to lead trade mission to Japan appeared first on Capitol News Illinois.