Banks Lose Challenge to Illinois Ban on Tax, Tip Swipe Fees (1)

An Illinois law barring card swipe fees on retail taxes and tips can take effect after a federal judge denied banks’ bid to block the legislation.

Card networks such as those maintained by Visa Inc. and Mastercard Inc. set the interchange fees charged for processing credit and debit card transactions, meaning that Illinois’ Interchange Fee Prohibition Act doesn’t affect banks’ ability to charge fees, Judge Virginia M. Kendall of the US District Court for the Northern District of Illinois said in a Tuesday ruling.

Banks and retailers have long battled over swipe fees, with Illinois at the center of ...