Judge Virginia Kendall of the US District Court for the Northern District of Illinois issued a permanent injunction on June 1, 2026 in Illinois Bankers Association v. Raoul. The injunction bars enforcement of the Interchange Fee Prohibition Act's interchange fee limitation against national banks, federal savings associations, out-of-state state banks under the Riegle-Neal Act, and payment card networks. The ruling came after the Seventh Circuit vacated the prior district court judgment on May 8. The OCC had issued an interim final order on April 29 asserting that the National Bank Act preempts the IFPA for national banks and federal savings associations.
The NCUA published a separate interim final rule in June 2026, effective June 30, confirming that the Federal Credit Union Act preempts the IFPA and similar state interchange fee laws for federal credit unions. The Illinois General Assembly also voted to postpone the IFPA's effective date from July 1, 2026 to July 1, 2027. The law now applies only to Illinois-chartered state banks, state-chartered credit unions, and Illinois-chartered savings institutions.
The IFPA was enacted in June 2024 as the first US state law to prohibit interchange fees on specific transaction components. The law targeted the tax and gratuity portions of electronic payment transactions. Its near-total neutralization through parallel federal preemption orders and court action reinforces that the National Bank Act and Federal Credit Union Act remain effective barriers to state-level interchange regulation. The Sixth Circuit is separately considering Linney's Pizza v. Federal Reserve, a challenge to the Fed's Regulation II debit interchange cap methodology, with no oral argument date set.