Financial services companies in Illinois are fighting a historic state law at a court fee in court and in Springfield because banks reach close to 1 July implementation, they say they are not equipped to meet.
“This train has not been made rail to move forward. For example, they are not constructed. They do not even know – Engineering’s share has not yet been done, let alone go alone, “Ben Jackson, executive vice -president of government relations at Illinois Bankers Association, said on Thursday after hearing the city’s situation on the case.
After the passage of Illinois’ MPs last year, the first-time law signed by the village JB Pritzkar will ban banks and credit card companies from charging retailers from charging retailers and pay a small fee on tips. Retailers who support measurements say they are advocating consumers, while banks claim that law can cause chaos in transactions that will inconvenience businesses and their customers.
Financial companies won a partial victory in the court when in December a federal judge agreed to create a temporary hold on the law for some types of institutions including national banks, which means that they are law to continue the court proceedings There is no need to follow. This week was expanded for out-of-set banks trading in Illinois this week, but other institutions including payment networks, Federal Credit Unions and In-State Banks are under law.
The IBA, as well as the American Bankers Association, the US Credit Unions and the Illinois Credit Union League Suit, who names Illinois’ Attorney General Quame Raul as a defendant.
Since a case is being prosecuted in the federal court in Chicago, the anti-springfields are also doing ground tasks for the potential reversal of the law, where it was part of the Democratic-LED revenue package last year. State rape. Margaret Crock, a Chicago Democrat, who heads financial institutions, introduced a bill last week that would completely cancel the law. However, there is no plan to move the bill “unless there is resolution from the courts,” he said.
Jackson said he was expecting a decision in favor of his group from American District Judge Virginia Kendall. He said, “Then we can return to the Legislature and say,” Let’s cancel the whole thing “before the General Assembly’s assembly session ends in May, he said.
While in the trial, the plaintiff has claimed partial prohibitory orders issued by Kendall, as a victory, the supporters of the law and even some banking interests have reduced it, saying that partial prohibition credit card Companies and other parts have not done much since. The transaction process is all connected.
Jerry Peck, senior vice president of government relations in Community Bankers Association of Illinois, said on Thursday, “It does not really give relief to any party until the prohibition is implemented to every party,” the Community Bankers Association of Illinois Jerry Peck, senior vice president of government relations, said on Thursday. The CBTI is not a plaintiff in the trial, but is supporting the bill of Croke to cancel the law.
Credit card companies and financial institutions currently charge retailers and restaurants, when consumers use credit cards based on the total transaction amount of goods, tax and any tip. Law will prevent financial institutions from charging so -called interchange on tax or gratuity parts of customer bills, target card companies can charge companies on retailers.
According to the National Retail Federation, the average of more than 2% credit card fees of retail transactions, which means that about $ 98 of every $ 100 sales goes to the retailer.
Opponents argue that the law will create inconvenience to anyone in Illinois that uses credit or debit cards as banks and credit card companies struggle to implement it, as well as leading large costs for financial services She does
The restrictions supporting the ban say the so -called interchange fees are hidden fees that pass customers. The Illinois Retailers Association asked to be added to the case as an intervention party, but Kendall denied that request last week.
Peck said that in view of the standing penalty imposed under the law, some small banks have no longer offered credit or debit card services as a result. He said that those banks are also trying to find out whether they need additional employees or accountants to implement the law.
“That potential thousand dollars fines per swipe can exclude a bank from the business,” Pake said that the members of the association include small Chicago-sector banks such as Devon Bank.
In June, a trade association representing credit card companies and banks started running online advertisements in Illinois, which announced that the law could force consumers to pay for parts of their procurement in cash in cash , At the same time print advertisements say, “Tipping on your credit card is closed. For Illinois. ,
In addition to being opposed to the law in general, banks and credit card companies say the timeline is unrealistic to comply. Opponents say that the consumer between Illinois goods, taxes and tips will be the first state for the need for differences on retail transactions, which creates a need for a complex software change.
The change has stopped a policy fight on many fronts. Community Bankers Group’s Peck said that in this session, Springfield aims to pursue a bill on the issue, while fighting in court is also “to give themselves belts and suspenders.”
State Retailers Association chief Rob Karr said in a statement that the bill was not surprised to protect their ability to increase swipe fees unilaterally on businesses and consumers. Are demanding
The new Illinois law is different from the federal law on the interchange fee pushed by the US Sen Dick Durbin, but it similarly affects visas, master cards and other large financial services companies.