ICYMI: The IFPA: A Government Overreach Disaster That Would Harm Financial Institutions, Businesses & Consumers

AFFM In Chicago Sun Times: “The wide-ranging ramifications of these policies should serve as a wake-up call to state lawmakers across the political spectrum about the dangers of government overreach in the financial sector.”

In case you missed it, Americans For Free Markets Executive Director John Wittman this week in a Chicago Sun-Times op-ed paints a grim picture of life under the Interchange Free Prohibition Act (IFPA), a new law that would upend the banking system as Illinoisans know it today.

“Established over 150 years ago under President Abraham Lincoln, our national banking system’s uniform regulatory framework has facilitated smooth and efficient financial services nationwide. In a move that will wind back the clock to a pre-Civil War era — and harm Illinois businesses and their customers — Gov. JB Pritzker recently signed into law the Interchange Fee Prohibition Act,” Wittman explains.

“The irony that the Land of Lincoln is leading the charge to upend the very system our nation’s 16th president championed should not be lost on us, nor should the unintended consequences,” he writes, including:

• “The quick and convenient experience consumers and businesses have today could be a thing of the past. The easy way to pay could be replaced by a clunky, two-or-more-step transaction or require cash.”

• “Small businesses would be forced to take on the increased costs or — more likely — pass them on to consumers. Further, the law will raise prices on credit card fees while significantly undermining the benefits, safety and security that payment card systems provide for consumers, be it through convenience, reward programs, card disputes or fraud detection.”

But the impacts are not exclusive to consumers and businesses in Illinois. The consequences of this law could have a larger, more devastating ripple effect around the country, Wittman cautions:

• “If other states follow Illinois’ lead in injecting state regulators into the business of national banks, we could soon face a patchwork of inconsistent and likely conflicting laws across the country, catching small businesses and consumers in the crossfire.”

• “Just as we have blue states and red states, if these types of conflicting proposals continue, national banks are at risk of becoming either ‘blue banks’ or ‘red banks’ as they attempt to navigate these laws. Not only will this fragmentation undermine the services, benefits and customer protection standards that are the foundation of our national banking system, it will also discourage innovation and reduce access to critical products and services that could be outlawed in one state but mandated in another.”

Wittman ends the piece with a call to action for policymakers to stand for free-market principles that benefit businesses and consumers alike:

“The wide-ranging ramifications of these policies should serve as a wake-up call to state lawmakers across the political spectrum about the dangers of government overreach in the financial sector. […]Elected officials everywhere should stand firm against similar ill-conceived legislation and reaffirm their commitment to the consistent national banking system that has served our country, its businesses, and consumers well for over a century.”

To read the full op-ed in the Chicago Sun-Times, click here.

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