Key Federal Regulator Wants Illinois Swipe Fee Limits Tossed (2)

A new Illinois law banning the collection of swipe fees on taxes and tips has the potential to “erode” the payments infrastructure and should be thrown out, a key federal banking regulator said.

The Illinois Interchange Fee Prohibition Act significantly interferes with the operations of banks with national charters by blocking them from charging interchange fees on parts of credit and debit card purchases, the Office of the Comptroller of the Currency said in a Wednesday brief supporting a lawsuit banks and credit unions filed against the law. The interchange fees cover the costs of processing transactions.

Using that standard, ...