Illinois State Representative Chris G. Miller said on May 1 that federal regulators have intervened in state legislation regarding credit card interchange fees on tax and tip portions of transactions in Illinois.
The issue centers around the Interchange Fee Prohibition Act, which was passed by Illinois lawmakers in 2024 to exempt the tax and tip portions of card transactions from interchange fees. Retailers argued that this change would reduce costs passed on to consumers, while banks and credit unions warned of operational disruptions and compliance burdens for payment systems. Estimates of annual savings for Illinois businesses ranged from tens of millions to over $500 million depending on the source, according to the Chicago Tribune.
Miller issued his statement following an interim final order by the Office of the Comptroller of the Currency (OCC) preempting the Illinois Interchange Fee Prohibition Act. The federal agency concluded that federal law prevents states from regulating certain interchange fees charged by national banks and federal savings associations, as reported in a Facebook post by Miller.
“The Federal Government announced an effort to block a controversial Illinois swipe fee law, set to take effect July 1, that would ban financial institutions that issue credit cards from imposing a fee on the retailers that accept these credit cards. The Democrats want the swipe fee law to require Illinois consumers who use their credit cards at restaurants to run their cards twice, once for the meal and again for the service fee or tip,” according to Chris G. Miller’s Facebook post.
Credit card interchange fees cost U.S. businesses more than $198 billion annually with merchants often passing costs to consumers through higher prices. The fees average around 2 percent per transaction and have risen steadily as card usage grows nationwide. Federal preemption decisions like the OCC’s action underscore long-standing tensions between state consumer protection efforts and national banking authority, according to a press release from the National Restaurant Association.
Miller is a third-generation cattle farmer and grain operator representing southeastern Illinois’ 101st District. He earned degrees from Eureka College and Lake Land College, serves as chairman of the Illinois Freedom Caucus, and was first elected in 2019. Miller was elected as a Republican representative in 2023, replacing Reggie Phillips.
