On Jun. 7, ILL LEG enacted bill prohibiting interchange fees on tax.
ILL LEG enacted HB 4951, included establishment of Interchange fee prohibition act.
Document dated Jun. 7, 2024, was added on Oct. 10, 2024, due to editorial backfill.
Interchange Fee Prohibition Act
Provides that, subject to certain exceptions, a payment card network, an acquirer bank, or a processor may not receive or charge a merchant any interchange fee.
On the tax amount or gratuity amount of an electronic payment transaction.
If merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction.
Merchant must transmit tax, gratuity amount data as part of authorization, settlement process to avoid being charged interchange fees of electronic payment transaction.
A merchant that does not transmit the tax/gratuity amount data pursuant to provisions may submit tax documentation for transaction to acquirer bank within 180 days.
Within 30 days after submission, issuer must credit merchant amount of interchange fees charged on the tax or gratuity amount of the electronic payment transaction.
Unlawful for an issuer, a payment card network, an acquirer bank, or a processor to alter computation and imposition of interchange fees by increasing rate or fee amount.
Imposed upon the portion of a credit or debit card transaction not attributable to taxes or other fees charged to retailer to circumvent effect of Interchange fee prohibition act
If in violation, subject to civil penalty of $1,000 per electronic payment transaction.
Legislative History
On Feb. 7, 2024, bill introduced into House; on Apr. 18, 2024, bill passed the House.
On Apr. 19, 2024, bill introduced in Senate; on May 26, 2024, bill passed Senate.
On May 29, 2024, House concurred amendments; on Jun. 7, 2024, governor approved.
Effectiveness
Art 150 on Interchange fee prohibition act effective Jul. 1, 2025, Public Act 103-0592.
In Oct. 2024, BPI reported amicus re Illinois interchange fee restrictions, #228962.
In Dec. 2024, ILL LEG Dept. of Revenue issued rules to implement act, see #238928.
