Recently, the U.S. District Court for the Northern District of Illinois Court granted a partial preliminary injunction sought by banking associations against the Illinois Attorney General over the Illinois Interchange Fee Prohibition Act (IFPA) which will limit the amount financial institutions can charge in interchange fees and regulate the use of consumer data. As previously covered by InfoBytes, several bank associations quickly challenged this law to prevent its implementation, seeking a preliminary injunction and asking the court to declare the IFPA preempted, unconstitutional and invalid. The court had previously granted a partial preliminary injunction, finding that certain applications of the state law were likely preempted by federal law. However, it reserved judgment on two specific claims, requesting additional briefing to confirm jurisdiction. Upon review, the court ultimately determined it had jurisdiction to adjudicate these claims, allowing for injunctions against unconstitutional state actions. The court evaluated the plaintiffs’ likelihood of success on the merits, focusing on whether federal law preempts the state law, and concluded the plaintiffs did not demonstrate a likelihood of success regarding the preemption claim under the Federal Credit Union Act but did meet the burden for the claim under a specific federal statute concerning out-of-state state banks. Consequently, the court granted the preliminary injunction in part, denying it for federal credit unions but granting it for out-of-state state banks.
