* Bloomberg Law…

Retailers can’t join in the defense of an Illinois law banning bank “swipe fees” on sales taxes and tips, a federal judge ruled.

The National Association of Convenience Stores, the National Retail Federation, Food Marketplace Inc., and two Illinois merchant trade groups had sought to become intervenor defendants in litigation over the Illinois Interchange Fee Prohibition Act.

But Illinois Attorney General Kwame Raoul (D) is providing an adequate defense of the law, so there’s no need for additional defendants, Judge Virginia M. Kendall of the US District Court for the Northern District of Illinois ruled Friday.

* From Judge Virginia Kendall’s ruling…

What’s more, because the state adequately represents Illinois merchants’ interest in the IFPA, permitting Proposed Intervenor Defendants to join the lawsuit would needlessly “use up the [C]ourt’s time and resources.” Even though the State does not oppose the proposed defendants from joining the suit, it does not mean that Proposed Intervenor Defendants could not delay the litigation down the line. When a new defendant joins, he acquires “control of the suit” and a “right to conduct the case in a way that may undermine the interests of the original plaintiff.” Depending on how the litigation proceeds, allowing Proposed Interveor Defendants to join the suit could unduly delay the suit.

* Crain’s…

In December, Kendall granted a preliminary injunction sought by the banking industry preventing implementation of the law, but it applied only to federally chartered banks and credit unions.

A status hearing on the case is scheduled for Feb. 4.

The retailers can still participate in the case in an amicus curiae, or friends of the court, basis.

“We think we would have added quite a bit to the case in terms of demonstrating the false claims that banks were making,” said Doug Kantor, general counsel for the National Association of Convenience Stores. “That said, we have a lot of confidence in the Illinois attorney general.”

* Ben Jackson/EVP, Illinois Bankers Association and Ashley Sharp/SVP, Illinois Credit Union League…

We welcome today’s court order denying the merchant groups’ request to join the litigation over the IFPA. These groups have already done enough damage to consumers and small businesses in the state by advancing this misguided law in the first place. This is a win for the Illinois economy and another step forward for our case against a very bad law.

* Rob Karr, president and CEO of the Illinois Retail Merchants Association…
 

While we certainly believe retailers who are paying these fees should have been granted status, the legal process is ongoing and we look forward to a full examination of the opaque swipe fee payment structure banks, processors, and credit card companies have for too long enjoyed.

* More…

* Payments Dive | Third of U.S. small businesses add credit card surcharges: A third of small businesses in the U.S. are now adding surcharges to credit card transactions, according to a recent J.D. Power survey. The data analytics firm surveyed 3,841 U.S. small businesses in August through October and found that 34% said they added a surcharge when a customer paid with a card. This was the first J.D. Power survey that included a question about surcharges and credit cards.

* NBC | The fight over credit card swipe fees enters a new year with no end in sight: And as many shoppers ditched cash for plastic cards or mobile payment apps, businesses have seen credit card transactions swell. They made up 32% of all U.S. consumer payments in 2023, up from 24% in 2019, according to a Federal Reserve study. Cash shrunk its share to 16% over the same period, down from 26%.

* href=”https://www.nytimes.com/2024/11/30/business/swipe-fees-merchants.html”>NYT | As Cash Fades, Small Retailers Embrace Efforts to Rein In Swipe Fees: As a pandemic precaution, droves of customers gave up cash in favor of contactless payment methods like tap to pay, and the percentage of Ms. Riordan’s sales processed through a card network rose to 75 percent, up from 65 percent in 2020. Now, so-called swipe fees are her third biggest expense, behind payroll and rent, amounting to roughly $18,000 a year. “There is no room to pay more — we’re just operating so thin,” Ms. Riordan said.