Proposed laws to ban the collection of interchange fees for certain payments have advanced in Colorado and Delaware even as federal courts weigh the legality of a similar law in Illinois.
Earlier this month, a Colorado Senate committee advanced a bill that would prohibit the collection of interchange fees for sales taxes, according to the Colorado Bankers Association. The bill advanced after the chamber’s Democratic leadership swapped out a committee Democrat who opposed the bill with the legislation’s primary sponsor.
Around the same time, a Delaware House committee advanced a bill to ban interchange fee collection for tips, Delaware Public Media reported.
Both bills have yet to be taken up by their respective chambers.
The Colorado and Delaware bills are modeled on the Illinois Interchange Fee Prohibition Act, or IFPA, which bans banks, payment networks and other entities from charging or receiving interchange fees in Illinois on the portion of a debit or credit card transaction attributable to tax or gratuity. A district court judge in February upheld most of the IFPA, but the American Bankers Association and other plaintiffs have appealed the decision.
The IFPA has opponents beyond the banking industry. Last week, the Office of the Comptroller of the Currency and a group of 10 former comptrollers filed separate court briefs warning that the Illinois law threatens the national banking system by interfering with federal powers to regulate that system.
