On March 2, the U.S. Court of Appeals for the 7th Circuit granted an unopposed motion to expedite briefing and oral argument in a consolidated appeal and cross-appeal over the validity of the Illinois Interchange Fee Prohibition Act (IFPA). The consolidated appeals question whether, and to what extent, the National Bank Act and other federal laws preempt the IFPA — an Illinois law that would bar credit card issuers and networks from charging or receiving “interchange fees” on the tax or gratuity portions of a transaction. The order set deadlines requiring: (i) plaintiffs to file their opening brief by March 6; (ii) the Illinois attorney general to submit a combined response and cross-appeal brief by April 3; (iii) plaintiffs to file their reply brief and responsive brief in the cross‑appeal by April 17; and (iv) all replies to be filed by May 1. The order stated that oral argument will be held during the week of May 11–15 or May 18–22, with a separate order to set the exact date. The plaintiffs requested expedited treatment such that the court could rule by June 15, thereby allowing time for the parties to evaluate their options for further review or prepare for compliance before the statute’s July 1 effective date.

As ordered, on March 6, the plaintiffs filed their opening brief, arguing that the district court erred in concluding the ban “does not directly regulate banks” because card networks set default fees — a view they say misstates both how the card‑payment system operates and how federal law applies. The brief contends that banks’ federally authorized powers to offer credit and debit cards and receive compensation are unaffected by whether they use network‑set default rates, and that limiting revenue while imposing what they describe as “undeniable” and “staggering” operational costs constitutes significant interference triggering preemption under the National Bank Act, Home Owners’ Loan Act, and Federal Credit Union Act. The plaintiffs also argue that Illinois’ parity statutes extend such protections to Illinois‑chartered institutions and that the Dormant Commerce Clause bars Illinois from exempting its own institutions while subjecting out‑of‑state counterparts to IFPA requirements.

The consolidated appeals stem from a February 10 decision by the U.S. District Court for the Northern District of Illinois that upheld the IFPA’s ban on interchange fees applied to sales taxes and gratuities while blocking its “Data Usage Limitation” provision for banks and federal credit unions (previously covered by InfoBytes here).